Daily Local News (West Chester, PA)
GOP, White House eye deep cuts to corporate tax rate
WASHINGTON » The White House and congressional Republicans are finalizing a tax plan that would slash the corporate rate while likely reducing the levy for the wealthiest Americans, with President Donald Trump ready to roll out the policy proposal at midweek.
The grand plan to rewrite the nation’s tax code would be the first major overhaul in three decades, delivering on a Trump campaign pledge and providing a sorely needed legislative achievement. It also is expected to eliminate or reduce some tax breaks and deductions.
The plan would likely cut the tax rate for the wealthiest Americans, now at 39.6 percent, to 35 percent, people familiar with the plan said Monday. They spoke on condition of anonymity ahead of a formal announcement.
In addition, the top tax for corporations would be reduced to around 20 percent from the current 35 percent, they said. It will seek to simply the tax system by reducing the number of income tax brackets from seven to three.
Trump has said he wanted to see a 15 percent rate for corporations, but House Speaker Paul Ryan has called that impractically low and risking adding to the soaring $20 trillion national debt.
The White House and congressional leaders planned an all-out blitz later this week to build support for the plan, which is now Trump’s top legislative priority as the GOP has struggled to repeal and replace Democrat Barack Obama’s health care law. The political stakes are high for Trump, who has promised to bring 3 percent economic growth and expanded jobs through tax cuts.
The plan being assembled lays out “pro-growth tax reform,” Rep. Kevin Brady, R-Texas, head of the tax-writing House Ways and Means Committee, told reporters on Capitol Hill. It will fix a tax code that is “so complex, so costly and so unfair,” he said.
Details will be filled in later by the committee, and legislation will be put forward after the House and Senate enact their budget frameworks, Brady said.
Republicans are divided over the potential elimination of some of the deductions, underscoring the difficulty of overhauling the tax code even with GOP control of the House and Senate.
Republicans control Congress but they are split on some core tax issues. They’re in agreement on wanting to cut tax rates and simplify the byzantine tax system but they’re divided over whether to add to the government’s ballooning debt with tax cuts. The GOP also is at odds over eliminating the federal deduction for state and local taxes. That deduction is prominently in the sights of the plan’s architects.