WASHINGTON—Republicans are reconsidering their plans to cut individual income-tax rates for the highest-earning households to 35%, as they gear up to release a blueprint Wednesday that includes wide-ranging rate cuts for businesses and individuals, according to people familiar with the discussions.

Republicans had been planning to collapse the seven current individual income tax brackets into three, with a bottom rate of 12%, a middle rate of 25% and a top rate of 35%.

The new plan allows for four brackets instead, with a top rate likely somewhere between the 35% proposal and the existing top rate of 39.6%, said those familiar with the discussions. That rate, and the income threshold at which it would apply, haven’t been determined.

The shift, which comes from top negotiators from the House, Senate and White House, is meant to give lawmakers leeway to agree on a rate that meets competing demands for how the tax code should be structured. Some lawmakers believe lower rates for all will spur economic growth, a top GOP priority. Others say it wouldn’t be fair for the wealthiest Americans to get a big tax cut.

Plans for the top tax rate are part of what the party, eager for a legislative victory after its failure to overturn the Affordable Care Act, hopes will be a sweeping overhaul of the entire U.S. tax system.