Corporate tax goal in doubt as Trump kicks off push on reformBy DAVID MORGAN and DAVID LAWDER
September 13. 2017 12:14AM
WASHINGTON — U.S. Treasury Secretary Steven Mnuchin on Tuesday cast doubt on President Donald Trump’s goal of cutting the corporate tax rate to 15 percent, even as the President moved to inject new urgency into a sluggish effort in Congress to lower taxes.
“Ideally, he’d like to get it down to 15 percent. I don’t know if we’ll be able to achieve that given the budget issues, but we’re going to get this down to a very competitive level,” Mnuchin told a conference in New York hosted by CNBC.
The administration is cranking up a publicity campaign to build public support for the Republican president’s tax goals, and Trump was due to meet with three Democratic senators later on Tuesday to discuss taxes.
But neither the administration nor the Republicans who control Congress have agreed on a detailed plan for overhauling the tax code, which was one of Trump’s main campaign promises in 2016, despite months of discussions.
A major concern is not adding to the federal budget deficit. It would balloon if tax rates were cut too deeply without providing offsetting federal spending reductions and closure of tax loopholes, both politically difficult tasks.
Mnuchin declined to say what business tax rate is achievable. He said he was “incredibly hopeful” a tax plan can be enacted this year, adding it could be retroactive to January.
Asked whether Trump would hold out for a 15 percent corporate tax rate, compared to the current 35 percent, White House spokesman Sarah Sanders said, “The President is prepared to push for as low of a rate as we can get. We’re going to continue to push for that and work for Congress to make sure we get the best deal possible.”
Republican Paul Ryan, the Republican speaker of the House of Representatives, said last week that “the numbers are hard” to make Trump’s 15 percent corporate tax rate target work. Ryan set his own goal at around 22.5 percent.
Trump’s legislative affairs director, Marc Short, said at a Christian Science Monitor event that “there’s probably compromise” necessary to get a deal but “we think that what’s best for the American people is a 15 percent corporate rate right now.”
’No new debt’
Sen. Joe Manchin of West Virginia, one of the three Democrats due to dine with Trump on Tuesday, said he is prepared to work with the President on taxes so long as it does not add new debt to the national balance sheet.
“No new debt, anything that shows me it’s going to add debt to our nation. I’ve got 10 grandchildren. I’m not going to do that to them,” Manchin said.
Financial markets rallied after Trump’s election victory last November in anticipation of rapid tax cuts, especially for corporations, but those expectations have faded.
“The likelihood of passing sweeping corporate reform has diminished,” Jack Ablin, chief investment officer at BMO Wealth Management, said in a research note.