A tax reform proposal released by Senate Republicans on Thursday is unlikely to earn President Trump’s praise due to language that would delay corporate tax cuts for another year, according to two sources close to the White House.
The legislation, which is expected to be fully unveiled Thursday afternoon, would gradually reduce the corporate tax rate as opposed to immediately lowering the current rate to 20 percent.
Lowering the corporate rate from its current level of 35 percent became a signature campaign promise of Trump’s during last year’s presidential election, and was adopted by House Republicans in their own tax bill released last week.
Some believe delaying the corporate tax cut until 2019 would help offset lost government revenues, but people close to the White House said there is a slim chance Trump will support such a move.
“They don’t want the corporate rate phased in for a variety of reasons,” one source told the Washington Examiner on Thursday.
A spokesperson for the White House pointed to comments made by Treasury Secretary Steve Mnuchin on Wednesday, when asked what Trump thought of the proposal.
“Our preference is that the corporate tax rate starts next year,” Mnuchin said, adding that the White House needs to see “the entire Senate package” before delivering a firm endorsement or not. “I assume it is a money issue as to how they are moving the piece around. I’m assured they would like to start this as soon as they can.”
“The longer we wait, the worse it is for the economy in making companies competitive,” Mnuchin added.
Aside from the White House, the Senate GOP tax bill also appeared to be in trouble among conservatives in the House and Senate. Rep. Mark Meadows, R-N.C., who leads the House Freedom Caucus, said he would oppose any delay in cutting corporate rates.
“I don’t understand the logic and I certainly can’t see why anybody would suggest it,” Meadows said.
Sen. David Perdue, R-Ga., said he and other Republicans were already looking for a way to change the language so the tax cut could take effect immediately.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, briefed the Senate GOP conference on the tax plan earlier Thursday, while Trump was readying for his departure from Beijing to Vietnam.
Meanwhile, House Speaker Paul Ryan told the Washington Examiner on Wednesday the lower chamber is “on track for passing [its tax bill] by opening day of gun season,” or November 18.
