GOP, White House eye deep cuts to corporate tax rate
WASHINGTON (AP) — 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.
Vice President Mike Pence was expected to hold events in Michigan and Wisconsin on Thursday to promote the tax plan with business leaders.
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.
Brady predicted the plan “will deliver the lowest tax rates on businesses in modern history.”
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.
House Republicans planned to hold a Wednesday retreat at Fort McNair, Maryland, a few miles from the White House, to discuss the proposal, with briefings led by Brady and Rep. Peter Roskam, R-Ill.
Trump planned to address the plan in a speech the same day at the Indiana State Fairgrounds in Indianapolis. Cabinet members and other top administration officials were fanning out on Thursday to talk about the benefits of overhauling the tax system.
“The tax reform I think is very critical and he knows that,” said Christopher Ruddy, the CEO of NewsMax and a longtime Trump friend. “And that’s why he’ll push really hard for it. But he’s got something big going for him here. The Republicans need to run on something next year and it’s tax cuts. So even if they don’t want to be particularly helpful to him, I think they’re going to give him this. If he has the tax cuts signed, I think it’s going to be very helpful for him.”
Touching with his conservative base, Trump planned to discuss the tax plan at dinner Monday night with representatives of several conservative, religious and anti-abortion groups.
Outside Republican groups and business interests are also planning a major push to advocate for the tax framework.
Corry Bliss, the executive director of the American Action Network, a conservative advocacy group, said it planned to spend $12 million — atop the $8 million it spent laying the groundwork for the tax overhaul — to help win passage of the plan.