UPDATE 2 — 9/7, 2:41 p.m. EDT: Speaking at a New York Times-hosted forum Thursday, House Speaker Paul Ryan curtailed President Trump’s call for a 15 percent corporate tax rate, citing budget issues.
“The numbers are hard to make that work,” he said. “Our goal is to get in the mid-to-low 20s, and we think that that’s an achievable goal.”
Later in the day during a press conference on Capitol Hill, Ryan said that tax reform legislation “is our No. 1 priority this fall.”
In a separate interview on Fox Business Network Thursday morning, Treasury Secretary Mnuchin said the White House has “made a lot of progress”, in negotiations with Republican leaders on the details of a tax plan.
UPDATE — 9/4, 1:50 p.m. EDT: In an interview with The Hill on Thursday, Democratic Congressman Tim Ryan indirectly endorsed part of Trump’s economic agenda, specifically lowering business taxes.
“To be competitive globally, we have to reduce the corporate tax rate,” Ryan said from his congressional office in Youngstown, Ohio. “We can’t just be the party of redistribution of wealth; we need to be the party of the creation of wealth in communities all over the country, not to just Silicon Valley, not just Wall Street, but all over.”
A day prior to Ryan’s remarks, Minority Leader Nancy Pelosi issued a statement calling Trump’s proposed reforms “a billionaires-first, trickle-down tax scheme that hands out massive tax cuts to the wealthiest, at the expense of American families.”
Touting his tax reform package in a speech during a stop in Springfield, Mo., on Wednesday, President Trump pushed Congress to simplify the federal tax code, specifically calling on lawmakers to dramatically reduce the corporate rate to 15 percent.
The United States of America, Trump said, “has lost its competitive edge.”
“We must reduce the tax rate on American businesses so they keep jobs in America, create jobs in America and compete for workers right here in America. Ideally . . . we would like to bring our business tax rate down to 15 percent,” Trump announced.
Trump first called for a 15 percent corporate tax rate in April. At a current level of 35 percent, the U.S. maintains one of the highest statutory corporate rates in the world.
Among developed nations, only France maintains a taxes for large businesses similar to the U.S. Japan’s rate sits at 24 percent; UK’s lie at 17 percent; German rates are approximately 16 percent; and Ireland boasts a 10 percent corporate rate.
A base rate applied to corporate profits, corporations often pay a lower rate when deductions for health insurance, pensions and investment returns are applied.
Economists say the rate when deductions are exercised rests at 27.9 percent–still higher than in most other developed nations.
A speech delivered to emphasize why tax reform is needed, Trump’s top economic adviser, Gary Cohn, laid out a more-detailed plan in an interview with the Financial Times on Friday.
Under Trump’s four-point plan, three individual deductions would remain: Deductions on mortgage interest, donations to charity, and annual contributions to Individual Retirement Accounts (IRAs). Trump would also double the standard individual deduction.
Similarly, Cohn told the Times the White House would eliminate the estate tax beyond $5.49 million; repatriate overseas cash; and slash corporate tax rates from 35 percent to 15 percent.
Although Cohn did not commit to a 15 percent corporate rate, it is believed the administration seeks a rate lower than Congress’ 20 percent target level.
[Reuters] [Business Insider] [AP] [YouTube/NBC News] [Photo courtesy Getty Images via CNBC]