Senate Republicans reportedly made a costly mistake when they hastily passed its tax bill early Saturday morning. Here's what you need to know.

Photo via Gage Skidmore/Flickr (CC-BY-SA)

There’s a $289 billion error in the Senate tax bill that could prove disastrous

Whoops.

 

Andrew Wyrich

Tech

Published Dec 6, 2017   Updated May 22, 2021, 8:53 am CDT

Senate Republicans reportedly made a costly mistake when they hastily passed their tax bill early Saturday morning.

In the process of writing the bill, which included lawmakers handwriting notes on it, Republicans reportedly appeared to have miscalculated the corporate alternative minimum tax, according to Slate, which is meant to prevent companies from paying less than 20 percent in taxes on their profits.

The original plan, according to NYMag, was to abolish the alternative minimum tax, but Republicans kept it in the bill to avoid crossing over a $1.5 trillion increase to the deficit, a threshold that could not be passed due to Senate regulations.

Essentially, the bill lowers the normal corporate tax rate to 20 percent, but left the alternative minimum rate at the same 20 percent it was before the changes. By doing so, the bill doesn’t allow companies to use the tax breaks that were supposed to be the hallmark of the bill.

This mistake—which Slate predicts would cost around $289 billion—will likely force the GOP to re-vote on its tax bill and could cause them to put in other revenue options, such as the graduate tuition income tax that was left out of the Senate’s bill but was included in the House bill.

You can read Slate’s analysis of the tax bill mistake here.

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*First Published: Dec 6, 2017, 9:39 am CST