Meadows Pushes Retroactive Corporate Tax Rate ‘in the Teens’

For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

By Kaustuv Basu

A tax reform bill should be retroactive, and lawmakers “should not let revenue-neutral be the constraint for us to be bold,” the chairman of the conservative House Freedom Caucus said.

Speaking at an Aug. 2 event organized by Americans for Prosperity and Freedom Partners, two groups funded by the billionaire Koch brothers, Rep. Mark Meadows (R-N.C.) said he favors a corporate tax rate that is “in the teens.” Meadows’ message at the gathering, which had the appearance of a pep rally for tax reform, was to “stay involved in the fight.”

AFP and Freedom Partners plan to use the month of August to press their case for an overhaul of the tax code. With border adjustment out of the way—Republicans dropped the controversial border adjustment tax from their agenda last week—the two groups and others plan to use the coming weeks to influence public opinion and lawmakers.

Meadows’ comments came two days after Marc Short, White House director of legislative affairs, said a tax bill would be marked up in the House in October and by the Senate in November. Short, who was speaking at an AFP-Freedom Partners event, said that the administration prefers a 15 percent business tax rate.

Increasingly Influential

Meadows is increasingly seen as an ally of President Donald Trump.

A Washington Examiner article in July said that Meadows has “cultivated a fruitful relationship with the Trump administration and has established a rapport with House leadership.”

The House Freedom Caucus, a group of about three dozen conservative lawmakers, could be an obstacle to a tax bill if its ideas don’t align with the legislation being developed by a group from the House, the Senate, and the administration.

Meadows told reporters after the event that his personal preference is to have a corporate tax rate of 16 percent and that it would be difficult for him to support a rate beyond 19 or 20 percent. The House GOP tax reform blueprint suggests a 20 percent corporate tax rate.

He said he was willing to look at a revenue-neutral tax bill, if “what they are talking about is the dynamic scoring of a growing economy.”

Looking Back

Any tax overhaul should be retroactive to the beginning of 2017, Meadows said.

If companies “can make a purchase or an investment in October, November or December this year, you know, the fact that you make it retroactive counts for the full calendar year,” Meadows said. Retroactivity could be a private sector stimulus, he said.

Texas Republican Bill Archer, a former member of Congress who chaired the House Ways and Means Committee, told lawmakers at a recent hearing that a tax bill shouldn’t be retroactive.

Ways and Means Chairman Kevin Brady (R-Texas) hasn’t indicated where he stands on the issue, while Rep. Peter Roskam (R-Ill.) said previously that Archer’s idea “that changes need to be prospective and predictable is good advice.”

To contact the reporter on this story: Kaustuv Basu in Washington at

To contact the editor responsible for this story: Meg Shreve at

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Daily Tax Report