GOP reconsiders corporate tax cut plan
Finance committee chair Hatch against rate of 22 percent
Republicans negotiating a final GOP tax bill are reconsidering proposals to shrink the plan’s corporate tax cut amid ferocious oppositions from Senate Republicans as well as outside conservative and business groups.
Both separate bills that passed the House and Senate would lower the corporate tax rate from 35 percent to 20 percent. But lawmakers negotiating the final bill have considered raising the corporate rate to 22 percent, raising new revenue they would use to offset other changes they plan to make in the final package.
On Friday, a conservative advocacy group tied to the Koch Brothers criticized Republican officials for considering the diminished corporate tax cut.
“Congressional leaders should stick to their vision for a tax code that improves the well-being of all Americans, and hold firm on a 20 percent rate that gives Americans confidence that the days of being average are over,” Nathan Nascimento, executive vice president of Freedom Partners, said in a statement. “Including a corporate tax rate any higher than 20 percent would be a last-minute deviation from the unified framework, and would weaken the progrowth aspects of the legislation.”
Senate Finance Committee Chairman Orrin G. Hatch, R-Utah, said earlier this week that he opposed raising the rate to 22 percent. “Not as far as I’m concerned,” he said. “It’s still 20.”
Other Republican senators also have come out strongly against scaling back the corporate tax cut, even while acknowledging that the bill has problems that had to be resolved.
“We’re far better off, for a lot of reasons, if we can hold it to 20, but we do have some challenges that we’ve got to work through,” Sen. Patrick Toomey, R-Pa., said.
President Donald Trump first opened the door to the 22 percent corporate tax rate this past weekend.
“It could be 22 when it comes out, but it could also be 20. We’ll see what ultimately comes out,” the president said.
Mr. Trump had long demanded that the corporate rate go no higher than 20 percent, making his statements, which came hours after the Senate passed its version of the tax bill, a surprise to many in the GOP. White House officials later walked back that position, with Marc Short, the White House legislative affairs director, telling Reuters that the administration stands behind the 20 percent figure.
On Wednesday, the Senate voted to send the tax bill to conference, where House and Senate lawmakers are attempting to craft a final package that can pass both chambers.
No plans were ever finalized, but negotiators had considered raising the corporate rate to 22 percent to fund several changes that they hoped would ensure support from on-the-fence members.
Republicans need at least 50 votes to pass the measure through the Senate, and they got 51 to successfully pass their first version earlier this month. The House bill passed in November by a wider margin, but many Republicans who voted for it said that they would seek additional changes in subsequent version of the legislation.
No Democrats in either chamber have supported the measure.
Republican leadership is trying to raise money to fix some of the objections raised over the bill, including the elimination of the state and local tax deduction that could hit wealthy GOP donors who live in blue states. Negotiators are also trying to find money to scale back the bill’s alternative minimum tax, which has alarmed corporations because it would limit the deductions and credits theycan claim.