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 Johnson10 top Republicans who continue to deny the undeniable GOP braces for impeachment brawl Bipartisan senators want federal plan for sharing more info on supply chain threats 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 CornynTrying to kick tobacco again This week: Congress returns to chaotic Washington GOP braces for impeachment brawl 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 HatchTrump holds more Medal of Freedom ceremonies than predecessors but awards fewer medals Trump to award Medal of Freedom to former Attorney General Edwin Meese Trump to award racing legend Roger Penske with Presidential Medal of Freedom MORE (R-Utah) also told reporters that they felt confident they had 50 votes to pass the broader tax bill.