Republican tax negotiators are targeting a corporate tax rate of 20 percent, two people familiar with the matter said. That would be higher than US 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 35 percent.
The plan he is to 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 is to travel to Indiana on Wednesday for a speech on tax issues that is expected to be more substantive than 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 his position on the corporate rate might be subject to compromise, the president might yet resist a plan with a rate higher than 15 percent, one person familiar with the matter said.
Trump on Friday night said 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.
House Speaker Paul Ryan and other congressional leaders have discussed a corporate tax rate in the low to mid-20s.
Based on discussions, the Republicans 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 US Secretary of the Treasury Steven Mnuchin, US 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 is to 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 US$5.49 million.
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 Web site Axios on Saturday reported that the Big Six had already agreed to a 20 percent rate.
House Republicans plan to hold a conference meeting on Wednesday and public information about the plan is expected shortly afterward.
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