While President Donald Trump has been publicly pushing for a 15% business tax rate in the United States, House Speaker Paul Ryan (R-Wis.) said Thursday that goal may not be feasible.
Continue Reading Below
“The numbers are hard to make that work,” Ryan told The New York Times, regarding the president’s intention. “He obviously wants to push this as low as possible, I completely support doing that, but at the end of the day we’ve got to make these numbers work.”
Ryan went on to say that the GOP wants to bring the business rate down from the current 35% to “the mid-to-low 20’s” and the overall goal is to align the U.S. corporate tax rate with the average rate of the industrialized world, which he said is 22.5%.
However, the president appears to have a different plan in mind. During a tax reform rally last week in Springfield, Missouri, President Trump said “ideally” he would like to slash the corporate tax rate by 20 percentage points.
“Ideally … we would like to bring our business tax rate down to 15% … [that] would make us highly competitive,” he said.
A 20 percentage point cut to the current 35% corporate tax rate has been the president’s preference since April, however some lawmakers have argued it is impossible to slash the business rate that significantly without adding to the deficit.
The House GOP’s blueprint, approved by Speaker Ryan, proposed a 20% corporate tax rate.
Sen. Orrin Hatch (R-Utah) told FOX Business in June that it would be “wonderful” if lawmakers could get the corporate tax rate down to 15%, but added that even a reduction to the 20% to 25% range would turn the U.S. economy “around overnight.” During the same interview, Hatch said he thought Trump may have stepped away from the 15% proposal, however recent speeches have indicated he has not.
As the administration looks for its first major legislative victory since Trump’s inauguration in January, some experts are concerned a lack of coherence on key details – such as how much to cut the corporate tax rate by – could hinder the process. The White House and GOP lawmakers have said tax reform will be done in 2017, however as Congressman Peter Roskam (R-Ill.) told FOX Business on Wednesday, lawmakers are still waiting for the “Big Six” to finalize parameters. In addition to specific tax rates, there is also uncertainty regarding whether the legislation should be revenue neutral.