WASHINGTON (Reuters) - Congressional Republicans and the Trump administration face a challenge reducing the U.S. corporate income tax rate to 25 percent, let alone to the 15 percent rate sought by President Donald Trump, the Senate’s top tax law writer said on Monday.
Senate Finance Committee Chairman Orrin Hatch, in an interview with Reuters, said that getting the corporate rate to 25 percent from 35 percent would bring a sea change to the U.S. economy. But he added that bipartisan cooperation may be necessary for tax reform to succeed.
The Utah Republican’s comments mark the first time that a member of the “Big Six” principals involved in high-level tax reform talks has described a 25 percent corporate tax rate as a challenge. In recent weeks, officials have described a target range of 20 to 25 percent. He described Trump’s 15 percent proposal as “very unlikely”.
“In fact, it would be kind of miraculous if we could get it down to 25 percent or less. I’d like to get it down to around 20 percent. I’d love to get it at 15 percent if we could,” Hatch said. “But I think the odds are, we’re going to be lucky to get it down at all.”
Twenty percent is the corporate tax rate proposed by Republicans in the House of Representatives.
He said success could hinge on getting Democratic support for tax legislation, saying he has had discussions on a bipartisan path forward with his committee’s top Democrat, Senator Ron Wyden. He called on Senate Democratic leader Chuck Schumer to “open the door” to cross-party cooperation.
Hatch and other Big Six negotiators from the Senate, White House, Treasury and House issued a joint statement last week, emphasizing their commitment to sweeping tax law changes.
On Monday, a White House aide said Trump would travel to promote tax reform in states including Michigan and Wisconsin. The White House hopes the House will vote on tax legislation in October and the Senate in November.
“If we could get the corporate tax rate down to, let’s say, a maximum of 25 percent, it would be a sea change for this country. It would be great,” Hatch said.
“In this current Congress, it’s almost impossible to change because the Democrats have just about slowed everything down to such a point that we can’t hardly move on anything. But I’m going to try to break through and get this done.”
Reporting by David Morgan; Additional reporting by Susan Cornwell; Editing by Kevin Drawbaugh, Jonathan Oatis and James Dalgleish