President Donald Trump’s goal of lowering the corporate tax rate to 15 percent may not be achievable, Treasury Secretary Steven Mnuchin said on Tuesday, several news outlets have reported.
“I don’t know if we’ll be able to achieve that, given the budget issue. But we’re going to get this down to a very competitive level, and what the exact number is less important. And what’s more important is making sure we have a competitive system,” Mnuchin said at a conference hosted by CNBC.
Mnuchin’s comments are similar to remarks that Speaker Paul Ryan made last week, when he noted that “the numbers are hard” to make a 15-percent rate possible, and that he’s shooting for a rate in the low-to-mid 20s, The Hill reports.
Republicans across the board want to lower the corporate rate, which is currently 35 percent, as part of tax reform. However, if Republicans want to pass a tax bill through reconciliation to prevent a Democratic filibuster, the legislation can’t add to the deficit outside the budget window, The Hill comments.
Mnuchin said on Tuesday that he hopes tax-reform legislation is bipartisan, stressing that “this is the most important issue for the American economy.”
Most Senate Democrats have said they won’t support a tax bill that cuts taxes for people in the top 1 percent of income.
Mnuchin also added that Republicans plan to eliminate the state and local tax deduction, so there won’t be a tax cut for people in high-tax states such as New York and California. He hopes to lower the top individual tax rate slightly to offset the elimination of the deduction so that residents of high-tax states don’t see a tax increase.
According to the Treasury Secretary, policymakers will set rules to prevent wealthy people from using the lower pass-through rate as a tax loophole. For example, services companies such as accounting firms won’t be able to use the lower rate, Mnuchin said.