President Donald Trump wants a big cut in corporate tax rates, a move that likely would increase the national debt and would breach a long-held goal by the Republicans of curbing borrowing by the federal government.
The president instructed his advisers to propose the cutting of the corporate tax rate to 15% from its current 35%, said officials in the White House who were not given permission to speak publicly.
The reduction in the corporate rate, which budget experts said could, cost the government as much as $2.4 trillion over a 10-year period is larger than what Republicans in the House proposed in the plan of their own.
Officials at the White House said Trump would make his announcement on Wednesday at the time he releases his broad principles of overhauling the country’s tax code, just days prior to a deadline of 100-day he gave himself to achieve the majority of his top goals during his campaign.
A discussion of changes to personal income taxes were amongst other tax codes changes said two Trump Administration officials.
Trump pledged the total tax cut would be the biggest in the history of the U.S., and advisers said that the growth in the economy that it stimulates would make up for any revenue shortfall.
Secretary of Treasury Steven Mnuchin on Monday said that the tax plan would pay for itself through economic growth.
However, any changes would need the backing of Congress and passing a plan of sweeping tax cuts that widens the current deficit would be almost impossible due to a lack of bipartisan support on Capitol Hill, said key players in each of the parties.
Many Congressional Democrats say they would not support that type of plan, making the proposal by Trump a difficult sell on Capitol Hill right out of the gate.
Meanwhile, Republicans have said for years that curbing the national deficit was a top priority for the nation and even GOP members who agree tax cuts could boost growth significantly acknowledge that any large tax could requires raising other revenue and or finding savings in the budget.
A tax plan from House Republicans that was endorsed by Paul Ryan the House Speaker would raise close to $1 trillion through imposing new tariffs on imports that have been frequently call border-adjustment taxes.
Trump considered that idea but it appears he has moved from that recently due to opposition from different industry groups.
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