President Donald Trump has ordered White House aides to draft a tax plan that slashes the corporate tax rate to 15 percent, even if that means a loss of revenue, according to people familiar with the directive.
During a meeting in the Oval Office last week, 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 might make it difficult to sell to GOP lawmakers who are wary of such a large tax cut. Trump told his team to “get it done” in time to release a plan by Wednesday, the people said.
Trump’s willingness to let deficits run higher also could hinder the passage of tax cuts that are permanent. Congressional Republicans plan on using a procedural tool known as reconciliation that would allow the tax legislation to pass with a 51-vote majority in the Senate, instead of the usual 60 votes. Under those rules, changes can’t add to deficits beyond a decade.
“It’s the same discussion they had about the Bush tax cuts in the previous administration: Are you better off having a smaller cut that is permanent, or a larger cut that is temporary?” said Mick Mulvaney, the president’s budget director, in an interview last week.
Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn are scheduled to meet Tuesday to discuss Mr. Trump’s tax proposals with Senate Majority Leader Mitch McConnell, R-Ky., House Speaker Paul Ryan, R-Wis., Senate Finance Chairman Orrin Hatch, R.-Utah, and House Ways and Means Chairman Kevin Brady, R-Texas. The meeting comes in advance of a Wednesday announcement by Trump about his principles for tax policy.