US officials temper corporate tax cut hope

White House ‘pretty close to finalising’ a bill, senior official says

Two top Trump administration officials said it may not be possible for President Donald Trump to deliver on his promise to cut corporate tax rates to 15 per cent.

In separate appearances yesterday, Treasury Secretary Steven Mnuchin and Marc Short, Trump’s legislative affairs director, both said Trump is still committed to that rate cut — down from the current 35 per cent — but acknowledged the potential for compromise.

“The president has made it clear since the campaign, ideally he’d like to get it down to 15 per cent. 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 said yesterday at CNBC’s Delivering Alpha conference in New York. “What the exact number is is less important, what’s important is making sure we have a competitive system.”

Best deal

“Ultimately there’s probably compromise to get to the best deal,” Short told reporters at an event sponsored by the Christian Science Monitor.

Trump also wants to apply the same rate to certain passthrough businesses, such as S corporations (ordinary business corporations) and partnerships, which don’t pay taxes themselves, but pass their earnings through to their owners, who pay taxes at their individual rates, Mnuchin said. However, he said, “Service companies that are passthroughs will not get the benefit of the rate.”

The White House and members of Congress are “pretty close to finalising” a bill and have settled many of the disagreements that divided their effort early in the process, Short said.

The White House is wary of relying solely on Republican support for the legislation after seeing the health care bill collapse and is genuinely seeking Democratic support, Short said.