President Trump has his eye on a corporate tax rate of 15 percent, even if that means adding to the national deficit, the Wall Street Journalreported Monday.
Trump reportedly told his aides to draft a proposal that could be presented to the American people this week.
But such a plan would be an extremely tough sell to Republican lawmakers who’ve spent the last decade making debts and deficits a central issue, Politico’s Playbook notes. Plus, it could put future, permanent, tax cuts at risk.
Mr. Trump’s willingness to let deficits run higher also could hinder the passage of tax cuts that are permanent. Congressional Republicans plan on using a procedural tool known as reconciliation that would allow the tax legislation to pass with a 51-vote majority in the Senate, instead of the usual 60 votes. Under those rules, changes can’t add to deficits beyond a decade.
“It’s the same discussion they had about the Bush tax cuts in the previous administration: Are you better off having a smaller cut that is permanent, or a larger cut that is temporary?” said Mick Mulvaney, the president’s budget director, in an interview last week.
On top of the deficit issue, there are several other roadblocks that get in the way of Trump’s proposed corporate tax cut, such as passthroughs, reconciliation, tradeoffs, and corporate splits.
Trump is expected to lay out the principles for his tax reform on Wednesday.