President Trump is having no truck with half-measures when it comes to spurring the economy to grow: he plans to fight for reducing corporate tax rates from their current 35% to 15%.
Trump is ignoring those who cavil that the federal deficit will grow substantially because of the reduced revenue accruing to the federal government, firm in his belief that the plan will more than offset the reduction in revenue by creating massive economic growth.
Treasury Secretary Steven Mnuchin stated, “The tax plan will pay for itself with economic growth.”
The Wall Street Journal reported, “During a meeting inside the Oval Office last week, Mr. Trump told staff he wants a massive tax cut to sell to the American public, these people said. He told aides it was less important to him that such a plan could add to the federal budget deficit, though that may make it more difficult to pass through Congress. Mr. Trump told his team to “get it done,” in time to release a plan by Wednesday.”
Businesses presently pay a whopping 10% of all revenue collected by the federal government; they are expected to cough up $340 billion in 2018.
The 35% tax rate in the United States is the developed world’s highest statutory corporate tax rate, although corporations have used deductions to avoid the massive hit. House Republicans are more timid than Trump, opting for reducing the rate to 20%.
As The Washington Post reported: “White House officials have said there are several basic principles to their tax plan. They want to simplify the tax code, cut the corporate tax rate, pass a giant middle-class tax cut, and create a way to punish companies that move overseas and ship goods back into the country. They also want to incentivize U.S. companies to move money back into the United States.”
Some House Republicans close to House Speaker Paul D. Ryan (R-WI) said they were worried Trump won’t get the support he needs from Capitol Hill and that would doom him to failure.