Senator Orrin Hatch (R-Utah), Chairman of the powerful Senate Finance Committee says the Trump administration is willing to accept a higher corporate tax rate than the 15 percent first proposed in order to pass comprehensive tax reform by the fall.
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In an exclusive interview with FOX Business correspondent Adam Shapiro Hatch said while it would be wonderful if the federal corporate tax rate, now 35%, could be lowered to 15%, comprise might be needed. “I think the President has probably come off of that particular figure” he said adding that a corporate tax rate between 20% and 25% would turn the U.S. economy around overnight.
Congressional staff and Members of Congress meet almost daily with members of the administration to forge consensus on a tax reform plan. National Economic Council Director Gary Cohn says the administration wants the bill introduced in early September. But Hatch says comprehensive tax reform, even in a Republican controlled Congress, will be a tough sell. staff and Members of Congress meet almost daily with members of the
One obstacle that has yet to be overcome, House Ways and Means Committee Chairman Kevin Brady, who continues to push for any tax bill to include a border adjustment tax (BAT). According to Brady, it’s the only way to pay for the hundreds of billions of dollars in tax cuts being considered. Hatch says Brady won’t give up on the BAT even though many Senate Republicans remain skeptical. “They’re going to have to show me how it does not violate international norms and how it really will work and how it’s not just another way of taxing people” said Hatch. He worries the BAT will force retailers including Walmart (WMT) and Target (TGT) to raise prices which in turn will hurt low-income and middle-class pockets of the population.
The Senate Finance Committee oversees more than 50 percent of the federal budget and has jurisdiction over tax, trade and health care policy. As Chairman, Senator Hatch wields a great deal of power in Congress. The tax reform bill will be written by the House, but still has to pass through Hatch’s committee in order to survive. The administration has said it won’t push for the bill to be introduced in the House of Representatives until both committees, House Ways and Means and Senate Finance, are in agreement on the details.
One provision made public when the administration proposed its tax reform outline are the three proposed income tax rates of 10%, 25% and 35%. Democrats call the administration’s tax reform plan a giveaway for the rich. But Hatch says the top 10% of income earners in the United States who pay roughly 68% of all federal income taxes, will not get a tax cut. Their tax rate may fall but Congress is considering eliminating most deductions like those for state and local taxes which will offset any gains from changing tax rates and income brackets.
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