GOP Tax Plan's Top Rate of 37% Said to Hit Earners at $600,000

(Bloomberg) -- Last-minute changes to the Republican tax bill contain an unpleasant surprise for married couples who make between $600,000 and $1 million: They won’t be getting as big a tax cut as lawmakers planned earlier.

The final bill would include those households in the highest individual income-tax bracket, which would pay a marginal rate of 37 percent, according to a summary of the bill’s changes obtained by Bloomberg News, as well as a person familiar with the bill’s contents.

Here are the brackets:

For joint filers:

• 10 percent: $0 to $19,050
• 12 percent: $19,050 to $77,400
• 22 percent: $77,400 to $165,000
• 24 percent: $165,000 to $315,000
• 32 percent: $315,000 to $400,000
• 35 percent: $400,000 to $600,000
• 37 percent: $600,000 and above

For single filers:

• 10 percent: $0 to $9,525
• 12 percent: $9,525 to $38,700
• 22 percent: $38,700 to $82,500
• 24 percent: $82,500 to $157,500
• 32 percent: $157,500 to $200,000
• 35 percent: $200,000 to $500,000
• 37 percent: $500,000 and above

In earlier versions, both House and Senate bills would have included households with income between $600,000 and $1 million in a 35 percent tax bracket.

Still, the final legislation would provide a cut for those households relative to current law -- they currently face a top rate of 39.6 percent.

Meanwhile, couples earning more than $1 million would do far better -- their top rate would move down to 37 percent from 38.5 percent in the Senate’s version and 39.6 percent in the House’s.

The new individual rates and brackets would be set to expire at the end of 2025, unless a future Congress chooses to extend them.

To contact the reporters on this story: Kaustuv Basu in Washington at kbasu8@bloomberg.net, Lynnley Browning in New York at lbrowning4@bloomberg.net.

To contact the editors responsible for this story: Alexis Leondis at aleondis@bloomberg.net, John Voskuhl at jvoskuhl@bloomberg.net.

©2017 Bloomberg L.P.