Trump has promised to release the outlines of his tax plan Wednesday and has said the plan would give Americans a tax cut bigger than "any tax cut ever". Still, lawmakers from both parties have said the corporate tax rate must be reduced to make the United States more competitive.
Trump's plan may also include a proposal to let multinationals bring foreign profits being held overseas into the United States at a steeply discounted income tax rate, another long-standing goal of the corporate tax lobbying community.
Although the administration has always been considering a border adjustability tax, which would tax goods imported into and sold in the United States and was championed by the Republican House speaker, Paul Ryan, it appears unlikely that this will be included in Wednesday's proposed tax plans.
Trump will also propose a repatriation tax on offshore earnings along the lines of his campaign proposal for a 10 percent levy, versus the 35 percent due on repatriated foreign profits under present law, the official said.
Trump administration officials, including Treasury Secretary Steven Mnuchin and National Economic Council director Gary Cohn, are expected to meet with congressional leaders, including Ryan and Hatch, at the White House later Tuesday.
Chris Edwards of the Cato Institute, a libertarian-leaning think tank, said Trump's desire to win was the guiding factor behind the 15 percent corporate tax rate instead of 20 percent.
The corporate tax rate is the rate that corporations pay on their net income. Despite his administration's certification of Iran's compliance with the 2015 nuclear deal, U.S. PresidentDonald Trumpon Thursday accused Iran of "not living up to the spirit" of the nuclear deal. It also potentially creates a tension point with House Republicans, who have spent years advancing a vision for tax restructuring of their own.
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Finally, with a corporate tax rate so high, it is no wonder that the current corporate tax system is riddled with loopholes.
The uncompetitiveness of America's corporate taxes is even starker when they are compared to trading partners.
On the campaign trail, Trump talked about big tax cuts for everyone, though distributional analyses of his proposals showed the top 1% would benefit the most by far. That controversial idea was in earlier initiatives floated by House Republicans as a way to offset revenue losses resulting from steep tax cuts. Orrin Hatch, R-Utah, the chairman of the Senate Finance Committee, told The Associated Press. "What this is not going to be is a loophole to let rich people who should be paying higher rates pay 15 percent", he said.
But Republicans have suggested they could skirt the 60-vote requirement by using expiration dates and dynamic scoring - a process that projects deficits also arguing that tax cuts will grow the economy.
A revenue-neutral tax plan is especially important because tax cuts that add to the deficit may expire after 10 years.
If Trump doesn't mind adding substantially to deficits, that will undercut efforts by Republican leaders in Congress to make the changes permanent because of complicated legislative rules. Under the rules of the Senate, a tax bill passed through reconciliation can not add to the federal deficit over 10 years.
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