President Donald Trump has
ordered White House aides to accelerate efforts to draft a tax plan slashing
the corporate rate to 15% and prioritizing cuts in tax rates over an attempt to
not increase the deficit, according to a person familiar with the directive.
During a meeting inside the Oval
Office last week, Mr. Trump told staff he wants a massive tax cut to sell to
the American people, the person said. It was less important to him if the plan
loses revenue. Mr. Trump told his team to “get it done,” in time to release
a plan by Wednesday.
A White House spokesman didn’t
immediately respond to a request for comment.
Treasury Secretary Steven Mnuchin
and National Economic Council Director Gary Cohn are scheduled to meet Tuesday
to discuss Mr. Trump’s tax proposals with Senate Majority Leader Mitch
McConnell, House Speaker Paul Ryan, Senate Finance Chairman Orrin Hatch and
House Ways and Means Chairman Kevin Brady of Texas. The meeting comes in
advance of a Wednesday announcement by Mr. Trump about his principles for tax
“This is part of our continuing dialogue with
the Trump administration on tax reform,” said AshLee Strong, a spokeswoman for
Mr. Trump promised from the
campaign trail to cut corporate rates to 15% from 35%. There likely aren’t
enough business tax breaks that could be repealed to offset the fiscal cost,
meaning such a move would increase budget deficits. Roughly, each percentage-point
cut in the tax rate lowers federal revenue by $100 billion over a decade, so a
20-point cut would cost the government $2 trillion, according to the
congressional Joint Committee on Taxation.
Any plan that adds to budget
deficits would be difficult to advance on Capitol Hill, for both procedural and
The president’s fellow
Republicans, who control both the House and Senate, are aiming to pass a tax
bill through a process known as reconciliation, which means they wouldn’t need
votes from Democrats. However, bills passed under reconciliation can’t increase
deficits beyond the typical 10-year time frame against which tax and spending
policies are projected.
That makes it difficult if not
impossible for Republicans to pass a deficit-financed tax cut that doesn’t
expire without getting Democratic votes in the Senate. Democrats are against
large tax cuts for corporations, especially at a time when Mr. Trump is proposing
cuts to government spending programs they prioritize, like housing, arts and
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