Taxes

GOP tax blueprint to propose slashing corporate, individual rates

By NANCY COOK and BRIAN FALER

A Republican tax reform blueprint to be released this week is expected to call for slashing both corporate and individual tax rates, three sources familiar with the negotiations said, as details start to leak out on the highly anticipated plan.

The outline from top negotiators in Congress and the Trump administration, known collectively as the Big Six, will propose bringing the corporate rate down to 20 percent, a compromise for President Donald Trump, who has advocated for a 15 percent rate over the protestations of some administration officials and congressional leaders such as House Speaker Paul Ryan.

The plan will also call for condensing individual tax brackets from seven to three, with the highest rate at 35 percent, down from the current 39.6 percent, an idea the administration also proposed in a one-page document released in April.

“We have a tax plan that is totally finalized,” Trump told reporters on Sunday evening before boarding a plane to Washington after spending the weekend in New Jersey. “I think it’ll be terrific. I think it’s going to go through.”

The president, however, still seemed stuck on the idea of the 15 percent corporate rate.

“We’ll see what happens. But I hope it’s going to be 15 percent. But it’s going to be substantially lower so we bring jobs back into our country,” he said.

The plan will also propose eliminating a deduction for state and local taxes, a change that Treasury Secretary Steven Mnuchin had previewed during a September POLITICO event.

The White House press office did not respond to a request for comment on Sunday.

It’s unclear whether the plan — which negotiators are expected to release on Wednesday and which still must be debated by lawmakers — will wade into any of the other deductions or tax breaks that the administration and congressional leaders have weighed eliminating to pay for reducing the corporate and individual tax rates.

Eliminating particular tax breaks would likely bring out the might of Washington’s lobbying efforts in full force. Tax negotiators are trying to delay that by withholding some details in hopes of giving the potential legislation a sense of momentum.

Two sources familiar with the negotiations said deductions for charitable donations and mortgage interest payments would not be touched, despite the Big Six’s earlier internal debates over capping the mortgage interest deduction.

The White House plans to begin to publicly sell the American public on the idea of a tax overhaul this week, with a Trump visit to Indiana to deliver a speech on tax reform followed by several appearances in the coming weeks by Cabinet secretaries.