White House, business groups push to cut taxes

Congress to pass matching budget resolutions while also raising the debt ceiling, something that has proved more difficult than initially expected.

Despite GOP unity on the decision to proceed with the tax cut plan, many key details are unsettled. Lawmakers haven’t decided, for instance, how much to cut taxes, what tax breaks to jettison to offset rate cuts or whether to cut taxes so much that it adds to the national debt.

The White House’s framework for cutting taxes could widen the deficit at least $5 trillion over 10 years unless there are major changes, budget analysts have warned. Such a deficit increase would probably imperil the bill.

Several groups are pushing the White House to “pay for” the tax cuts by eliminating commensurate tax breaks, something the administration has yet to settle on.

“Real tax reform that is paid for is much harder than fiscally irresponsible tax cuts that aren’t,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a group that advocates for deficit reduc- tion. “I think there are numerous camps that represent those different viewpoints.”

Cutting taxes can be a popular idea on the campaign trail, but it’s very difficult to do politically.

Republicans and many Democrats think the corporate tax rate — 35 percent — is too high. But few companies pay that rate because tax breaks and deductions that allow them to reduce their taxable income. The White House has proposed dropping the tax rate to 15 percent, although it has signaled it might have to agree to something higher to get a consen- sus. House Republicans have said they want the tax rate brought down to 20 percent.

If the White House and Republicans try to lower the tax rate but also eliminate deductions, they will run into opposition from companies that benefit from those breaks.

Cutting taxes could remove the incentive for companies to move overseas, and the White House and many Republicans say this could lure trillions of dollars in foreign earnings back into the United States for investment.

The White House and Republicans also want to cut taxes that individuals and families pay, saying the current process is too complicated. Trump has promised a huge reduction in taxes for the middle class. But the White House hasn’t defined who it considers to be part of the middle class or how much their taxes should be cut.

Trump has said he would increase taxes on the wealthy to cut taxes for the middle class but not advancing any details.

The White House is counting on financial support from business groups to help pass the tax cuts, something it lacked when it worked to repeal the Affordable Care Act.

The Business Roundtable, a trade organization that includes the country’s largest companies, plans a multimillion-dollar advertising campaign beginning Aug. 4 that will include national cable television spots as well as radio ads in 250 stations nationwide, targeting key lawmakers. Other groups also are preparing to lend support.

Treasury Secretary Steven Mnuchin is scheduled to deliver a speech about the administration’s tax plans Monday at an event hosted by Americans for Prosperity, a conservative group backed by the Koch family.