Politics

Trump Tax Reform: Mnuchin Says 15 Percent Corporate Tax

White House working with Congress on plan to cut business rate in half and let American families file on a 'postcard'

President Donald Trump will cut corporate tax rates to 15 percent and will not raise taxes on the rich to above 40 percent.

That was the message of Trump’s two top tax aides on all matters taxation at an event sponsored by Americans for Prosperity, a conservative-leaning free-market organization.

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Steven Mnuchin, treasury secretary, said Trump is moving forward with tax reform this year, regardless of what Congress does with health care reform. Mnuchin was speaking at the Freedom Partners’ “Unrig the Economy” event at the Newseum in Washington, D.C.

Joining Mnuchin was Marc Short, the White House legislative director, who also said it’s full speed ahead on tax reform, despite the recent failure of the long-promised repeal of the Affordable Care Act.

Mnuchin and Short spoke with Tim Phillips, the president of the conservative-leaning Americans for Prosperity, in a publicly broadcast discussion. It was a clear sign the White House is moving on to the next phase of Trump’s two-pronged agenda: tax reform.

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“We are going to make the business tax competitive again and bring back trillions of dollars of money that is offshore, that is going to invest in America in jobs, in factories, and capital,” said Mnuchin.

Mnuchin said taxpayers can count on a tax cut, and he went back to promising a 15 percent rate for corporations. The current corporate tax rate is 35 percent, the highest among industrialized nations.

Politico had reported that Trump and Republicans were considering compromising on a rate of 25 percent. But Mnuchin said the rate would be proposed at 15 percent, which is more in line with some industrialized nations that are seeking to compete with the United States for business. Short later reiterated the proposed 15 percent rate after a question from LifeZette.

Short told the forum that Mnuchin and other Trump officials have met with more than 200 members of Congress about tax reform.

The Republicans won’t likely have the filibuster to worry about. Short said the Republicans may use the budget process and insert broad tax reform into it. Budget issues tend to be exempt from the Senate’s rule of the filibuster, whereby it takes 60 senators to cut off debate and vote.

Phillips reminded the audience that it has been a generation — actually, more than that — since Washington, D.C., last passed tax reform. President Ronald Reagan signed comprehensive tax reform with the help of a Republican-led Senate and a Democrat-led House of Representatives in 1986.

Since then, Congress and presidents have tinkered with rates on individuals and businesses, but have not accomplished reform of the large tax code.

Trump’s general outline would reduce the seven individual brackets to three: 10, 25 and 35 percent. It would double the standard deduction and eliminate most deductions, except for charities and mortgages, generating revenue while not raising taxes.

Mnuchin ruled out an oft-reported claim that Trump’s political adviser, Steve Bannon, would like to raise the top income tax rate for individuals to 44 percent. The current rate is 39.6 percent. He noted that the top individual rate is also the rate for many small businesses, so raising it would also raise rates on those businesses. Other small businesses pay the top corporate tax rate but cannot afford the fleet of lawyers that big corporations pay.

The treasury secretary said he would like to finally reduce the complexity of the tax code, and kicked off the forum by suggesting individual taxpayers could soon file their annual taxes on a postcard.

But as with much of Trump’s agenda, much is up to Congress.

Mnuchin said the legislative process will kick off after the August recess, and it could be voted on by the end of the year. Congressional observers say that is a tall order.

“This is a pass-fail exercise,” said Mnuchin, “and we will pass tax reform.”

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Political reporter, LifeZette. Indiana University journalism grad. Boston U. business grad. Former Indiana, Alabama statehouse reporter, Daytona Beach editorial writer.

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