Trump Wants Tax Plan to Cut Corporate Rate to 15% -- Update
April 24 2017 - 2:55PM
Dow Jones News
By Michael C. Bender, Richard Rubin and Nick Timiraos
WASHINGTON -- President Donald Trump has ordered White House
aides to accelerate efforts to draft a tax plan slashing the
corporate rate to 15% and prioritizing cuts in tax rates over an
attempt to not increase the deficit, according to a person familiar
with the directive.
During a meeting inside the Oval Office last week, Mr. Trump
told staff he wants a massive tax cut to sell to the American
people, the person said. It was less important to him if the plan
loses revenue. Mr. Trump told his team to "get it done," in time to
release a plan by Wednesday.
A White House spokesman didn't immediately respond to a request
for comment.
Treasury Secretary Steven Mnuchin and National Economic Council
Director Gary Cohn are scheduled to meet Tuesday to discuss Mr.
Trump's tax proposals with Senate Majority Leader Mitch McConnell,
House Speaker Paul Ryan, Senate Finance Chairman Orrin Hatch and
House Ways and Means Chairman Kevin Brady of Texas. The meeting
comes in advance of a Wednesday announcement by Mr. Trump about his
principles for tax policy.
"This is part of our continuing dialogue with the Trump
administration on tax reform," said AshLee Strong, a spokeswoman
for Mr. Ryan.
Mr. Trump promised from the campaign trail to cut corporate
rates to 15% from 35%. There likely aren't enough business tax
breaks that could be repealed to offset the fiscal cost, meaning
such a move would increase budget deficits. Roughly, each
percentage-point cut in the tax rate lowers federal revenue by $100
billion over a decade, so a 20-point cut would cost the government
$2 trillion, according to the congressional Joint Committee on
Taxation.
Any plan that adds to budget deficits would be difficult to
advance on Capitol Hill, for both procedural and partisan
reasons.
The president's fellow Republicans, who control both the House
and Senate, are aiming to pass a tax bill through a process known
as reconciliation, which means they wouldn't need votes from
Democrats. However, bills passed under reconciliation can't
increase deficits beyond the typical 10-year time frame against
which tax and spending policies are projected.
That makes it difficult if not impossible for Republicans to
pass a deficit-financed tax cut that doesn't expire without getting
Democratic votes in the Senate. Democrats are against large tax
cuts for corporations, especially at a time when Mr. Trump is
proposing cuts to government spending programs they prioritize,
like housing, arts and the environment.
Write to Michael C. Bender at Mike.Bender@wsj.com, Richard Rubin
at richard.rubin@wsj.com and Nick Timiraos at
nick.timiraos@wsj.com
(END) Dow Jones Newswires
April 24, 2017 14:40 ET (18:40 GMT)
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