GOP Sen. Steve Daines of Montana said he backs the Republican tax bill after securing a bigger tax break for pass-through businesses.
“After weeks of fighting for Main Street businesses including Montana’s farmers and ranchers, I’ve decided to support the Senate tax cut bill which provides significant tax relief for Main Street businesses,” Mr. Daines said in a statement Friday morning.
Mr. Daines was one of a group of GOP senators who had yet to firmly commit to the tax bill, although he had voted in support of it on procedural votes. He had joined with Sen. Ron Johnson (R., Wis.) to push for better tax treatment of pass-through businesses, where owners pay taxes at the individual rates.
On Thursday night, Mr. Daines negotiated to bump up the amount of pass-through income that owners could deduct from their income. The Senate bill had initially said owners could deduct 17.4% of their income. By the middle of this week, GOP senators had bumped that up to 20%. And on Thursday night, Mr. Daines negotiated a boost to 23%, his office said.
Pass-throughs are partnerships, limited-liability companies and other entities whose earnings are passed along to owners and then taxed as personal income. While the top corporate rate would drop to 20% from 35% under companion House and Senate measures, the top rates for pass-through filers would remain over 30% in the Senate version of the bill.
The Daines amendment would push the effective rate on pass-through businesses below 30%.