U.S. NEGOTIATORS TARGET 20pc CORPORATE TAX

Plan will be higher than Trump’s 15pc goal , say sources

WASHINGTON

REPUBLICAN tax negotiators are targeting a corporate tax rate of 20 per cent, according to two people familiar with the matter. That would be higher than President Donald Trump wants — setting up a key decision for the president on a top legislative priority.

Trump has called for cutting the corporate rate to 15 per cent, down from the current 35 per cent. The plan he would see this week was expected to recommend cutting the top individual tax rate to 35 per cent, down from 39.6 per cent, said two people.

Trump will travel to Indiana on Wednesday for a speech on tax issues that was expected to be more substantive than recent rallies that were intended to raise enthusiasm for an overhaul, said the people.

While members of Trump’s own administration had suggested that Trump’s position on the corporate rate might be subject to compromise, the president might yet resist a plan with a rate higher than 15 per cent, said one person.

Trump said on Friday during a campaign rally in Huntsville, Alabama that a tax plan would be released this week, and described it as “massive tax cuts”.

The White House and congressional Republican leaders are preparing for a push in the next few months to pass tax legislation, after a series of defeats since Trump’s inauguration, including their continuing failure to repeal Obamacare. Cutting the corporate tax rate is one of Trump’s core principles for an overhaul.

House Speaker Paul Ryan and other congressional leaders have discussed a corporate tax rate in the low to mid-20s.

Based on recent discussions, the Grand Old Party (GOP) would probably aim for a rate in the range of 20 to 24 per cent, said Ryan Ellis, a republican tax lobbyist who previously worked as chief tax policy director for Grover Norquist’s Americans for Tax Reform.

Ellis said he also expected the so-called “Big Six” negotiators to seek a top individual rate of 35 per cent.

The Big Six are Treasury Secretary Steven Mnuchin, National Economic Council director Gary Cohn, Ryan, senate majority leader Mitch McConnell and the chairmen of the congressional tax-writing committees.

Ellis also said he expected the framework would call for doubling the standard deduction claimed by many middle-class tax filers, and for repealing the estate tax, which applies only to estates worth more than US$5.49 million (RM23.06 million).

It’s unclear how detailed the framework will be or whether it will represent the unified approach that the president and GOP leaders have sought. Bloomberg