Aide tries to refocus U.S. tax debate after Trump's
corporate rate remark
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[December 08, 2017]
By David Morgan
WASHINGTON (Reuters) - President Donald
Trump's weekend remark about a scaled-back tax cut for corporations
sparked behind-the-scenes debate in the U.S. Congress, with a White
House aide trying on Thursday to minimize the impact of the president's
comment.
Two rival tax bills, passed separately by the Senate and the House of
Representatives, propose cutting the U.S. corporate tax rate to 20
percent, but they differ in other areas that Republicans are trying to
merge into final legislation.
Speaking to reporters after the Senate approved its tax bill on
Saturday, Trump said the corporate tax rate in the final legislation,
expected soon from lawmakers, "could be 22 (percent) ... it could also
be 20 (percent)."
The remark whetted the interest of some Republicans who see a slight
upward bump in the proposed corporate tax rate as capturing needed
federal revenue that would help solve other problems with the
legislation, according to lobbyists.

"The 20 percent rate ought to be our goal," said House Ways and Means
Committee Chairman Kevin Brady, who is expected to head a bicameral
House-Senate negotiating committee.
"My view is the president is giving us flexibility in that area if it's
needed. No decision's been made on if that's needed," the Texas
Republican told reporters.
But White House legislative affairs director Marc Short told Reuters on
Thursday that Trump was not voicing support for a higher proposed
corporate rate. Instead, he may have been only expressing views conveyed
to him by Republican senators.
"I think he was just reflecting what conversations he had heard from
them, but that ... wasn't intended to signal: this is an endorsement of
raising the corporate rate," Short said.
"We believe that 20 percent is the right number ... 20 percent is about
as high as we feel comfortable going," he said in an interview.
Trump and his Republican allies have plenty riding on what happens over
the next few weeks.
A sweeping U.S. tax overhaul, which has not been achieved since 1986,
would give Republicans their first major legislative victory of 2017,
after their failure to overturn former President Barack Obama's
healthcare law. Without a win, Republicans fear they could lose their
control of the House and Senate in the 2018 congressional elections.
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U.S. President Donald Trump gestures as he speaks at the White House
in Washington, U.S., November 27, 2017. REUTERS/Kevin Lamarque

But it may be too late to avoid confusion over priorities as the tax debate
moves forward in Congress.
Lobbyists said many perceive that Trump and his advisers would accept a
corporate rate higher than 20 percent.
White House economic adviser Kevin Hassett said on Thursday that a 22 percent
corporate rate would not undermine the economic boost that Republicans say tax
cuts will create.
Analysts say the corporate income tax rate could be a ready source of revenue
for lawmakers, as they move toward a final bill that can lose no more than $1.5
trillion in revenue over the next decade under Senate rules.
Republicans are considering a more costly deduction for state and local taxes
than the $10,000 property tax deduction contained in the House and Senate bills.
One version would allow taxpayers to choose a $10,000 deduction for either
property or income taxes.
House lawmakers also want to adopt the House bill's repeal of the corporate
alternative minimum tax, which would cost about $40 billion in revenue over a
decade, according to the Joint Committee on Taxation. Senate retained the tax.
A House limit on the amount of debt interest payments that businesses can deduct
from their income would also cost about $136 billion more than the Senate
version, the JCT said.

Analysts say a one percentage point change in the corporate rate equals about
$100 billion in revenues over a decade.
(Reporting by David Morgan; Editing by Kevin Drawbaugh and James Dalgleish)
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