GOP’s tax plan aims for 20 percent corporate rate

WASHINGTON — Republicans are targeting a corporate rate of 20 percent in their federal tax overhaul plan, according to three people familiar with the emerging blueprint — a number that represents a cut from the current 35 percent rate but falls short of the 15 percent President Donald Trump has pushed for.

The plan remains fluid, said the Republicans, who spoke on the condition of anonymity to describe sensitive talks. But they said the template is taking a more definite shape ahead of a planned rollout next week by the negotiators from the White House, Senate and House.

Earlier this week, key senators on the budget committee reached a deal on the potential fiscal impact of the tax overhaul, agreeing to add as much as $1.5 trillion to the budget deficit over the next decade to accommodate the anticipated revenue lost under the GOP plan. Republicans think the corporate rate cut and other incentives will stimulate economic growth, offsetting the revenue loss.

Republicans familiar the emerging details said the plan will also allow “full expensing,” which permits businesses to fully deduct their capital expenses immediately rather than writing off their depreciation over the course of several years. But that provision, they said, will not be permanent but will sunset after five years because of its cost.

Americans for Tax Reform President Grover Norquist, who has been involved in the plan’s drafting, said a 20 percent corporate rate combined with five years of expensing would achieve the GOP’s tax objectives.

“That will kickstart the economy in a way that re-elects every Republican who has a vowel in his name,” he said Friday.