US Speaker Ryan opens door to delayed corporate tax cut

WASHINGTON: US House of Representatives Speaker Paul Ryan left the door open to a possible delay in implementing a huge corporate tax cut, following a media report that his fellow Republicans in the Senate are exploring the option.

Republicans in Congress are working on separate plans to give the US tax code its biggest overhaul since the 1980s.

President Donald Trump and his House allies have proposed slashing the rate companies pay to 20 per cent from 35 per cent.

But the Washington Post reported on Tuesday that the Senate could include a one-year delay in its version of the bill to make it easier to comply with the chamber’s rules that aim to limit any legislation’s impact on the US deficit.

Wall Street, where investors remain focused on the tax bill’s chances of passage, was trading largely flat on Wednesday as bank stocks came under pressure from a near-flat Treasury yield curve.

Asked if House Republicans would consider a delay in implementing the lower corporate rate, Ryan told Fox News Radio on Wednesday:

“So what economists tell us ... is that you still get very fast economic growth and you actually are encouraging companies to spend on factories and plants and equipment and hiring people sooner with the phase-in.”

Ryan, the highest ranking Republican on Capitol Hill and a former chairman of the House’s tax-writing panel, said both chambers of Congress would work on their own tax cut package and iron out the differences in a conference committee.

“The Senate is still focused on getting an economic growth plan and the House does as well. So at the end of the day, this is all to the good, it’s just a debate about how good it gets,” he said.

The tax overhaul is a priority for Trump, who says it will boost economic growth and create jobs.

Republicans have yet to score a major legislative accomplishment since he took office in January, even though they control Congress as well as the White House.

Democrats have blasted the tax proposals as a give-away to corporations and the rich.

Senate Republicans are still on track to release on Thursday their version of a bill to overhaul the nation’s tax code, a congressional source told Reuters.

Axios had reported on Wednesday that the bill would be delayed.

Financial markets are nervous about the potential outcome of lawmakers’ plans to cut corporate taxes.

“Investors realise that the House tax plan is a preliminary one and don’t really expect it to pass. We haven’t even seen what the Senate version of the bill looks like,” said Brad McMillan, chief investment officer at Commonwealth Financial.

“I think the market has already processed a lot of good news including strong earnings, and now some of the worries are taking over,” he said. — Reuters