- Marco Rubio and Mike Lee, two GOP senators, introduced an amendment to the Republican tax bill on Wednesday.
- The amendment would make the child tax credit more generous, but it would also cut the corporate tax rate to only 22% instead of the 20% proposed in the current tax bill.
- President Donald Trump has said the 20% corporate rate is his one red line in the tax bill.
Republican Sens. Marco Rubio and Mike Lee on Wednesday announced an amendment to the GOP tax plan that would increase the tax breaks for families with children at the expense of corporations.
The pair said the proposed change was “a chance to do better by working families in this tax bill.” It is unclear how much support the amendment has on Capitol Hill, but it is unlikely to go over well in the White House.
The amendment would pay for the expansion of the child tax credit by reducing the federal corporate tax cut, lowering the rate to 22%. As written, Senate Republicans’ Tax Cuts and Jobs Act would cut that rate to 20% from the current 35%.
President Donald Trump has said the 20% rate is a red line, and Treasury Secretary Steven Mnuchin has said the corporate rate staying at 20% is “the president’s number one issue that is not negotiable.”
A White House official told Bloomberg on Wednesday that Trump would oppose the amendment. Sarah Huckabee Sanders, the White House press secretary, didn’t immediately respond to a request for comment.
Rubio and Lee, in their statement, argued that the amendment was written to ensure enough tax benefits were going to families instead of corporations.
“Right now, 70% of the tax cuts we’re considering would go to businesses, and only 30% to individuals,” the senators said. “This amendment would level the playing field for families, while still kick-starting national investment and growth.”
Here are the four key provisions of the Rubio-Lee amendment. It would:
- Make the child tax credit refundable: The statement from Rubio and Lee said the credit, which the Senate bill as written would increase to $US2,000, would become refundable up to the “payroll tax liability (15.3% of earnings).”
- Reduce the phaseout threshold for unmarried filers: In the current legislation, the child tax credit would phase out for all filers starting at $US500,000. The Rubio-Lee amendment would lower that threshold to $US250,000 for any unmarried filer.
- Switch the child tax credit to grow according to the chained consumer price index: Chained CPI typically grows at a slower rate than normal CPI, so the child tax credit would increase at a slower pace. Most provisions on the individual side of the current follow this growth formula.
- Bump the corporate rate cut to 22%: The senators said this would “fully pay for the above changes.”
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