President Trump has called for cutting the corporate rate to 15%, down from the current 35%. The plan he’ll see this week is also expected to recommend cutting the top individual tax rate to 35%, down from 39.6%, according to sources.
President Trump and treasury secretary Steven Mnuchin have said previously that they didn’t want the tax plan to offer any tax cut to the highest earners —and that they’d balance a rate cut by eliminating deductions that the wealthy use to cut their tax bills.
Mr Mnuchin said in November “there will be no absolute tax cut for the upper class”.
On CNN’s State of the Union yesterday, Mr Mnuchin didn’t mention specific tax rates. President Trump plans a trip to Indiana this week for a speech on tax issues, a source said.
The White House and congressional Republican leaders are preparing for a push in the next few months to pass tax legislation.
Cutting the corporate tax rate is one of President Trump’s core principles for an overhaul. While members of President Trump’s own administration have suggested that his position on the corporate rate might be subject to compromise, the president may yet resist a plan with a rate higher than 15%, according to one source.
Speaking last Friday, President Trump said that a tax plan would be released this week, and described it as “massive tax cuts”. The effect of such cuts on the $20 trillion (€16.7tn) federal debt remains to be seen.
Last week, a pair of key Republican senators reached an agreement on the framework for a 2018 budget resolution that’s expected to allow for a tax cut of $1.5tn over 10 years that would add to the deficit — before accounting for any growth or other economic effects of the cuts.
The Washington Post reported that Republicans were “targeting” a corporate rate of 20%, citing three unnamed people. But the plan remains fluid, those people told the paper.
The news website Axios reported on Saturday advisers had already agreed to a 20% rate.