WASHINGTON – House Speaker Paul Ryan said Thursday President Donald Trump's goal of lowering the corporate tax rate to 15% would be difficult.
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"The numbers are hard to make that work," Mr. Ryan (R., Wis.) said in an interview with the New York Times streamed live on Thursday. He said he agreed with Mr. Trump's goal, but that "at the end of the day, we have to make those numbers work."
Mr. Ryan said House Republicans saw as an "achievable goal" lowering the corporate tax rate to somewhere in the mid to low 20% range.
Mr. Ryan's own tax plan, released in 2016 with other House Republicans, called for a 20% corporate tax rate and a 25% tax rate on so-called pass-through businesses, which pay taxes through their owners' individual tax returns.
But that 20% rate relied on about $1 trillion in revenue over a decade from a provision called border adjustment, which would have taxed imports and exempted exports from U.S. taxation. Republicans backed off that idea in July under pressure from retailers and divides among GOP senators, leaving a gaping hole in the plan to drive down the corporate tax rate.
Getting the corporate rate down is difficult because there are relatively few tax breaks that Republicans agree they want to repeal to offset the fiscal cost of lowering the tax rate from 35%. Each point reduces revenue by about $100 billion over a decade.
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The U.S. corporate tax rate of 35% is the highest among major developed countries and companies say it distorts economic decisions and discourages investments in the U.S. Many companies don't pay that full rate because of tax breaks created by Congress to encourage certain activities and because they are earning and booking profits in low-tax foreign countries.
Republicans are constrained by the budget rules that prevent them from increasing long-run deficits if they want to pass a bill without significant Democratic help. They're aiming to use the procedure known as reconciliation, which can allow for tax cuts in the near term but not after the end of the budget scoring window, typically 10 years.
Mr. Ryan stuck to the goal of finishing a major tax bill by the end of the year. That is going to be a challenge.
So far, Republicans haven't released a bill or scheduled any committee votes. They also haven't agreed on a budget that they need to unlock the reconciliation procedures.
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(END) Dow Jones Newswires
September 07, 2017 09:37 ET (13:37 GMT)