For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
The White House and Republican leaders have reached some final decisions on a tax reform framework that could be released by the end of the month.
“There were some very specific items that had been outstanding that were put on the table today and consensus was reached,” a White House official said on the condition of anonymity. The official provided no other details but said the group is hoping to mark up a tax bill in late September or early October.
The optimism came hours after House Speaker Paul D. Ryan (R-Wis.) said in a New York Times interview Sept. 7 that Republicans are aiming for a corporate rate of about 22.5 percent. The rate was the most specific any Republican leader has publicly mentioned. It is also a signal that leaders recognize the rate can’t be as low as they initially hoped.
The Trump administration has repeatedly pushed for a business tax rate of 15 percent, though Ryan admitted “the numbers are hard to make that work.”
The so-called Big Six—Ryan, Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, House Ways and Means Committee Chairman Kevin Brady (R-Texas), Senate Majority Leader Mitch McConnell (R-Ky.), and Senate Finance Committee Chairman Orrin G. Hatch (R-Utah)—have been meeting regularly to finalize tax overhaul details. They have hinted for weeks about releasing details, which could be imminent because some conservatives say they need to know more about the plan before backing the budget resolution that would set it in motion.
Still, paying for a corporate rate cut of the size Republicans want is a significant challenge, and staffers and lobbyists have said it’s unlikely the final number will be that low. A Republican staffer said a corporate rate of 25 percent is being discussed. Some Republican members are also wary of what pay-fors will be needed to fund lower rates.
“I’m confident we’re going to deliver the lowest rates in modern history for the U.S. That still requires a lot of work and hard decisions but we’re headed that direction in a positive way,” Brady told reporters Sept. 7.
Ryan’s hint at a corporate rate shows some progress, but members still have significant areas where they need consensus. For example, Republicans haven’t announced any decisions on individual rates beyond condensing the existing tax brackets. The House majority whip’s office will meet with members at the end of September to educate them about plans going forward.
After scrapping the border adjustment provision, tax writers must find a way to replace the revenue to offset rate cuts. The one-page plan the White House released in April would cost as much as $5 trillion over 10 years, according to an estimate from the nonpartisan Committee for a Responsible Federal Budget.
The White House official said that the administration recognizes that a tax bill will change during the legislative process. But it was important to have “a framework that the committees will be able to run with.”
Several Ways and Means members said they hadn’t heard details of any final decisions reached in the Sept. 7 meeting.
On the likelihood of a corporate rate in the low-20 percent range, Rep. Tom Reed (R-N.Y.) said, “it’s all going to be a moving target as we move through the process, so the bottom line is we go as low as we possibly can.”
With assistance from Laura Davison in Washington.
To contact the editor responsible for this story: Meg Shreve at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)