'Industry-friendly' Trump wants corporate tax cut to 15%

Cutting corporate tax rate to 15% from its current 35% level was one of Trump's campaign promises

President Trump has instructed his advisors to make cutting the corporate tax rate to 15 per cent a centrepiece of his tax-cut blueprint to be unveiled this week, according to people with knowledge of his plans, even if that means a significant reduction in revenue that could jettison his campaign promise to curb deficits.

Cutting the corporate tax rate to 15 per cent from its current 35 per cent level was one of Trump’s marquee campaign promises, part of his vision of carrying out “maybe the biggest tax cut we’ve ever had.” But he has yet to publicly embrace the move since taking office, and his decision to do so now could set up a showdown with Congress over a proposal that would most likely blow up the deficit.

The White House is planning to formally roll out its tax plan on Wednesday, ending months of speculation about the president’s intentions for rewriting the tax code and following a prolonged period of confusion in which he and his top advisers sent mixed messages about what elements they favoured and how the tax cut would be structured. The people who described Trump’s corporate tax cut target, first reported by The Wall Street Journal on Monday, did so on the condition of anonymity because they were not authorised to discuss it before an official announcement. The president plans to unveil the tax cut during a week when Republicans will be trying to pass a spending measure needed to keep the government from shutting down. Repealing and replacing the Affordable Care Act remains a legislative priority, although whether it is considered more important than a tax overhaul changes frequently. The 15 per cent rate is lower than what House Republicans proposed in the tax cut blueprint being pitched by Speaker Paul D Ryan, and it could be difficult to move through Congress. Senator Orrin G Hatch of Utah, the Republican chairman of the Senate Finance Committee, said on Monday that such a deep cut might not be well received by Trump’s party because of its potential to increase the deficit. The non-partisan Tax Policy Center estimated last year that the corporate tax cut plan Trump had proposed, which at the time included the repeal of the alternative minimum tax, would cost $2.4 trillion over a decade. Still, Steven Mnuchin, the secretary of the Treasury, said on Monday that he was confident the administration’s tax proposal would “pay for itself” through economic growth. He said a growth rate of three per cent was achievable.

Mnuchin also said the Trump administration would lay out plans to cut middle income tax rates, simplify the tax code and make American companies more competitive with foreign ones.

The White House would not say if it is on board with the “border adjustment” tax, a 20 per cent tax on imports that is central to Ryan’s plan. There are also lingering questions about what shape the rest of the plan will take, and even about the timetable for pushing it through.

 

©2017 The New York Times News Service