GOP sets 23 percent deduction for small businesses to save tax bill

GOP sets 23 percent deduction for small businesses to save tax bill
© Greg Nash

Senate GOP leaders have agreed to boost the deduction for pass-through businesses from 17.4 percent to 23 percent in a bid to save the teetering tax-reform bill. 

Sen. Ron JohnsonRonald (Ron) Harold JohnsonGOP senators eager for Romney to join them The House needs to help patients from being victimized by antiquated technology Comey’s original Clinton memo released, cites possible violations MORE (R-Wis.), who nearly derailed the legislation Thursday evening because he felt it did not do enough to help small and medium-sized businesses, announced the agreement. 

“I appreciate the Senate leadership’s willingness to work to close the gap between pass-through businesses and C corporations,” Johnson announced. 

Johnson on Thursday initially called for increasing the deduction for pass-through businesses to 25 percent, but settled for 23 percent.

Entering a meeting of the entire Senate Republican conference on Friday morning, Johnson said he did not know how the increased deduction would be paid for. 

Johnson had proposed cutting the deduction large C corporations take for state and local taxes to raise revenue to offset a bigger tax cut for pass-through businesses. 

But Senate Republican Whip John CornynJohn CornynMcCarthy: ‘No deadline on DACA’ NSA spying program overcomes key Senate hurdle Hoyer suggests Dems won't support spending bill without DACA fix MORE (R-Texas), entering the same meeting, said state and local tax deductibility for large companies would not be eliminated. 

Cornyn and Senate Finance Committee Chairman Orrin HatchOrrin Grant HatchKoch groups: Don't renew expired tax breaks in government funding bill Hatch tweets link to 'invisible' glasses after getting spotted removing pair that wasn't there DHS giving ‘active defense’ cyber tools to private sector, secretary says MORE (R-Utah) also told reporters that they felt confident they had 50 votes to pass the broader tax bill.