White House Scaling Back Goals for Business Tax Cuts


A White House spokeswoman, Natalie Strom, said: “Discussions between the White House and Congress are progressing in a very positive direction. We have always had more areas of agreement than disagreement, and we feel confident we will develop a unified plan that will deliver on our goals of economic growth and tax relief for hard-working middle-income families.”

A corporate tax rate in the 20 percent range would put the Trump administration in line with the tax blueprint released last year by Mr. Ryan and would reflect a more realistic approach to overhauling the tax code.

While Mr. Trump has promised the largest tax cut in history, political and fiscal realities have already begun to intervene.

The collapse of the Republican efforts to repeal the Affordable Care Act means that more than $1 trillion in taxes from that law, for the time being, are expected to remain in place. Republicans have also met fierce resistance to imposing a border adjustment tax on imports, and opposition to the elimination of the state and local income tax deduction for individuals is growing louder.

Cutting the corporate tax rate to 15 percent from 35 percent would reduce tax revenue about $2 trillion over a decade, according to the Tax Foundation. It estimates that a reduction to 20 percent would reduce revenue by $1.6 trillion.

The constraints facing Republicans on tax reform were made plain on Tuesday when the House Budget Committee released a budget resolution outline that, if passed, would unlock the legislative tool that would let Republicans rewrite the tax code without the help of Democrats. The resolution requires that changes to the tax code do not add to the deficit.

Lawmakers in the House and Senate have been holding hearings this week as they prepare for tax reform. It was evident that Republicans continue to disagree on the best way to broaden the tax base so that they could set a corporate tax rate that is low enough to make the United States more competitive with other countries around the world. Most of the major economic powers have a corporate rate that is half the rate in the United States.

In a sign that Republican leaders may have learned some lessons from the health care debacle, Mr. Ryan is taking his tax pitch on the road this week. On Thursday, he will visit a sneaker factory in Massachusetts, where he will make the case that rewriting the tax code is the key to improving the fortunes of American manufacturers.

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