White House considers scaling back proposed corporate tax cut: reports

White House considers scaling back proposed corporate tax cut: reports
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The White House is discussing a corporate tax rate that’s higher than the 15 percent rate included in the plan administration officials released in April, according to media reports.

Politico reported Tuesday that administration officials are looking at a corporate tax rate of 20 to 25 percent, citing “administration officials and other advisers.” Similarly, The New York Times on Wednesday reported that the rate for businesses could ultimately be in the low 20 percent range, citing a person briefed on the topic.

A corporate rate in the 20 percent range would still be lower than the current corporate rate of 35 percent. The tax-reform blueprint House Republicans released last year included a 20 percent corporate tax rate.

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GOP congressional leaders and administration officials are meeting regularly in order to reach consensus on a single tax-reform framework. Officials have said they hope to release the framework in September and pass legislation by the end of the year.

A statement from the White House did not explicitly mention the corporate tax rate but said that tax-reform discussions are ongoing.

“Discussions between the White House and Congress are progressing in a very positive direction,” White House spokeswoman Natalie Strom said. “We have always had more areas of agreement than disagreement and we feel confident we will develop a unified plan that will deliver on our goals of economic growth and tax relief for hard-working middle-income families. Decisions are best made through discussions with Members of Congress and staff, not hashed out in the press, and that's exactly what we're doing.”

In a speech to retailers on Tuesday, Vice President Pence touted the 15 percent rate from Trump’s April plan.

“Our corporate tax rate — it’s remarkable to think — is one of the highest in the developed world. Our outdated system of worldwide taxation literally penalizes companies for being headquartered in America,” he said. “But not for long. President Trump’s plan is to slash the business tax rate to 15 percent.”

But Rep. Dave Brat (R-Va.), a member of the House Freedom Caucus, said he was concerned by reports that the corporate tax rate could be higher than in the White House’s plan.

“If you’re going from 15 to 20 to 25 [percent], that’s not optimal. That’s not a good direction,” Brat told The Hill on Wednesday after raising the issue during a budget hearing. “Is it going to get higher? I don’t know. What do we got to do to make sure rates go down?”

The reports of a corporate tax rate in the 20 percent range come after senators suffered a major setback in their efforts to repeal ObamaCare. Brat argued that without savings from the healthcare bill, Republicans would struggle to push down corporate tax rates.

“When a trillion dollars falls out of healthcare, tax rates can’t go down as much. And that’s not good,” he said. “It’s all connected.”

On Wednesday morning, Brat expressed his dismay at the reports directly to Corey Lewandowski, Trump’s former campaign manager who is still close to the president. Lewandowski was the guest speaker at the Conservative Opportunity Society event.

But not all conservatives were fretting about the 20 percent range being discussed by the White House.

“At the end of the day, if we had a choice between 35 and 20 [percent], then that’s still better,” Rep. Scott DesJarlais (R-Tenn.), another Freedom Caucus member, told The Hill. “Anyone who haggles understands you don’t always get what you want.

“So I wouldn’t look at that as a defeat. I would look at that as an improvement.”

 

Scott Wong contributed to this report.