Following a report suggesting the corporate tax rate in Republicans’ final tax reform bill could be higher than 20 percent, some conservatives are making the case again for the 20 percent rate.
“If we want to see wage growth to help America’s families, a rate reduction on employers has to be part of the picture,” Pete Sepp, president of the National Taxpayers Union, said in a conference call Monday.
The Hill reported that as lawmakers in the House and Senate work in conference to resolve their differences, the 20 percent corporate tax rate could be in jeopardy.
“If we want the small businesses who supply and subcontract with corporations to have greater opportunities … a rate reduction on corporations is necessary,” Sepp said.
Since President Donald Trump originally campaigned on cutting the corporate tax rate to 15 percent, Grover Norquist, president of Americans for Tax Reform, said lawmakers should not consider raising the rate.
Andy Roth, a vice president of the Club for Growth, said, “The average American family out there that is looking for tax relief, they’ve got to be bewildered by what is going on right now, that we’re even having this conversation about why the corporate tax rate shouldn’t go up past 20 percent.”
“The best way to restore confidence with the American taxpayer is to forget all of this horse trading and all of this fighting about keeping various loopholes and deductions and go with the most pro-growth tax cuts that both chambers and the White House has agreed to,” he added.
Nathan Nascimento, executive vice president of Freedom Partners, said a 20 percent corporate tax rate would foster economic growth.
“Today’s 35 percent corporate tax rate is not competitive, and today’s tax code is not fair,” Nascimento said. “While neither bill is perfect, reducing the corporate tax rate from 35 to 20 [percent] would send a message to the rest of the world that America is going to compete, and importantly it would begin to level the playing field for all businesses, especially those who don’t get the special carve-outs in today’s tax code.”
“Treasury expects approximately half of this 0.7 percent increase in growth to come from changes to corporate taxation,” the report reads. “We expect the other half to come from changes to pass-through taxation and individual tax reform, as well as from a combination of regulatory reform, infrastructure development, and welfare reform as proposed in the administration’s fiscal year 2018 budget.”
Trump, who has said he wants to sign a bill by Christmas, says he is confident the tax reform legislation will pass soon.
Getting closer and closer on the Tax Cut Bill. Shaping up even better than projected. House and Senate working very hard and smart. End result will be not only important, but SPECIAL!
— Donald J. Trump (@realDonaldTrump) December 10, 2017
Adam Michel, a tax policy analyst at The Heritage Foundation, told The Daily Signal in an email that raising the corporate tax rate beyond 20 percent is “unacceptable.”
“The 20 percent corporate tax rate is the main item driving the tax reform coalition,” Michel said, adding:
The most important reason for tax reform is to fix our uncompetitive business tax system, which has held back American wage growth and job creation. Raising the corporate tax rate to 22 percent means the combined U.S. tax rate will remain above both the [Organization for Economic Co-operation and Development] and worldwide averages. It also reduces the long-run economic growth by more than 10 percent.
A vote on the final bill is expected “as soon as December 18,” according to CNN.