GOP rushes to reach deal on tax cuts

Last-minute changes could affect millions of Americans

WASHINGTON — Congressional Republicans on Tuesday rushed toward a deal on a massive tax package that would reduce the top tax rate for wealthy Americans to 37 percent and slash the corporate rate to a level slightly higher than what businesses and conservatives wanted.

In a flurry of last-minute changes that could profoundly affect the pocketbooks of millions of Americans, House and Senate negotiators agreed to expand a deduction for state and local taxes to allow individuals to deduct income taxes, as well as property taxes.

Negotiators also agreed to set the corporate income tax rate at 21 percent, said two congressional aides. Both the House bill and the Senate bill would have lowered the corporate rate from 35 percent to 20 percent.

Negotiators agreed to bump it up to 21 percent to help offset revenue losses from other tax breaks, the aides said.

As the final parameters of the bill took shape, negotiators agreed to cut the top tax rate for individuals from 39.6 percent to 37 percent in a windfall for the richest Americans. The reduction is certain to provide ammunition for Democrats who complain that the tax package is a massive giveaway to corporations and the rich.

Under current law, the top tax rate applies to income above $470,000 for married couples, though lawmakers are completely reworking the tax brackets.

Sen. Susan Collins, R-Maine, who has previously expressed opposition to reducing the rate for the wealthiest earners, acknowledged Tuesday that the negotiators appear to have agreed on the move. “I don’t think lowering the top rate is a good idea,” Collins said.

She didn’t threaten to vote against the final bill, however, if it included a lower rate.

Among the other tax breaks, negotiators agreed to eliminate the alternative minimum tax for corporations, a big sticking point for the business community, the aides said. They also agreed to let homeowners deduct interest on the first $750,000 of a new mortgage, down from the current limit of $1 million.

GOP lawmakers hope to finalize a bill no later than Friday, vote next week and deliver the package to the president’s desk before Christmas.

Republican lawmakers were optimistic Tuesday that a deal was imminent.