The top individual rate is said to be 35 percent, from 39.6
Republican tax negotiators are targeting a corporate tax rate of 20 percent, according to two people familiar with the matter. That would be higher than President Donald Trump wants -- setting up a key decision for the president on a top legislative priority.
Trump has called for cutting the corporate rate to 15 percent, down from the current 35 percent. The plan he’ll see this week is also expected to recommend cutting the top individual tax rate to 35 percent, down from 39.6 percent, two people familiar with the matter said.
Trump will travel to Indiana on Wednesday for a speech on tax issues that’s expected to be more substantive than recent rallies that were intended to raise enthusiasm for an overhaul, a person familiar with the planning said.
While members of Trump’s own administration have suggested that Trump’s position on the corporate rate might be subject to compromise, the president may yet resist a plan with a rate higher than 15 percent, one person familiar with the matter said.
The people asked not to be identified because details of the tax plan and Trump’s schedule have not been publicly announced. Trump said Friday night during a campaign rally in Huntsville, Alabama that a tax plan would be released this week, and described it as “massive tax cuts.”
The White House and congressional Republican leaders are preparing for a push in the next few months to pass tax legislation, after a series of defeats since Trump’s inauguration, including their continuing failure to repeal Obamacare. Cutting the corporate tax rate is one of Trump’s core principles for an overhaul.
20 to 24 Percent
House Speaker Paul Ryan and other congressional leaders have discussed a corporate tax rate in the low to mid-20s. Based on recent discussions, the GOP will probably aim for a rate in the range of 20 to 24 percent, said Ryan Ellis, a Republican tax lobbyist who previously worked as chief tax policy director for Grover Norquist’s Americans for Tax Reform.
Ellis said he also expects the so-called “Big Six” negotiators to seek a top individual rate of 35 percent. The Big Six are Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Ryan, Senate Majority Leader Mitch McConnell and the chairmen of the congressional tax-writing committees.
Ellis also said he expects the framework will call for doubling the standard deduction claimed by many middle-class tax filers, and for repealing the estate tax, which applies only to estates worth more than $5.
It’s unclear how detailed the framework will be -- or whether it will represent the unified approach that the president and GOP leaders have sought.
No ‘Rubber Stamp’
Senate Finance Chairman Orrin Hatch, a member of the Big Six, has said that he’ll regard the document as a guide, but his panel won’t be bound by it. Nor will his panel be a “rubber stamp” for any particular plan, Hatch said.
The Washington Post reported that Republicans were “targeting” a corporate rate of 20 percent, citing three unnamed people. But the plan remains fluid, those people told the paper. The news website Axios reported on Saturday that the Big Six had already agreed to a 20 percent rate.
House Republicans plan to hold a conference meeting Wednesday, and public information about the plan is expected shortly afterward.
Spokeswomen for Ryan and for House Ways and Means Committee chairman Kevin Brady declined to comment Saturday when asked about the reported details of the emerging plan.
While the corporate tax rate will be one of the key decisions, Trump and congressional Republicans have also proposed condensing the existing seven tax rates to three, and cutting the top rate to 35 from 39.
In recent weeks, Trump had suggested that he might abandon the plan to cut the top individual rate, and focus instead on a middle-class tax cut. Brady and others, however, have said they’d prefer to see across-the board tax cuts.
— With assistance by Steven T.
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