Published: Thu, April 27, 2017
Entertainment | By Alexander Flowers

Donald Trump tax reform to seek 15 per cent corporate rate


The White House made its opening bid for what officials called the "biggest tax cut" in U.S. history - with cuts that would benefit businesses, the middle class and certain high-earning individuals - but left unanswered questions about whether the plan would be paid for, or how.

Trump wants to slash the corporate tax rate from 35 to 15 percent and also allow private and "pass-though businesses" like his own real estate empire to file like corporations.

The White House on Wednesday was to release broad outlines of a tax plan that would cut the top rate for small businesses from 39.6 percent to 15 percent, according to an official with knowledge of the plan.

"Regretfully we don't expect to have any Democratic involvement in" a tax overhaul, McConnell said. And a Senate rule prevents any tax plan from adding to the federal deficit outside a 10-year window - if it's enacted with a simple majority rather than 60 votes, a procedure known as budget reconciliation.

Trump now wants to cut the top tax rate for individuals percent to the "mid-30s", an official with knowledge of the plan told The Associated Press ahead of Wednesday's announcement.

There's a disparity in the numbers, but the economic theory in both plans is the same: tax cuts will pay for themselves because they spur economic growth. "If we have them for 10 years, that's better than nothing".

Trump's tax plan does have an advantage over Ryan's and other plans, including those supported by some Democrats, that aim to be make up the forgone revenue. It would also eliminate most itemized tax deductions, the estate tax and an ObamaCare tax on net investment income for high earners.

Shortly after the election, Mnuchin said Trump's tax plan would provide "no absolute tax cut for the upper class".

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Still, the proposal could reduce the tax burden for the wealthy as well.

Among the biggest changes is the repeal of the state and local tax deduction; the effect of that would be to shift the tax burden from low-tax states such as Texas and Florida to high-tax states such as NY and New Jersey.

The nonpartisan Joint Committee on Taxation said a big cut in corporate taxes, even if temporary, would add to long-term budget deficits.

They praised lower tax rates for families and businesses. "They don't need another huge tax break".

"It's not the federal government's job to be subsidizing the states", Mr. Mnuchin said. Democrats have sought to use the tax debate to pressure Trump to release his returns, arguing the information is necessary to evaluate how Trump's tax proposals would affect his personal wealth and his business' bottom line. Asked how he measured that, he pointed to the size of the rate cut for corporations from 35% to 15%. However, Steven Mnuchin, offering no details on how it would work, said that measures would be put in place so that companies and wealthy individuals would not be able to take advantage of the 15 percent rate.

"That's not tax reform", Schumer said on the Senate floor.

"We are going to repeal the death tax", he said.

He also warned that a plan that dramatically shrinks tax revenues would "explode the deficit".

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