Republicans attempt to fit US$5 trillion of tax cuts into US$1.5 trillion box
US tax plan, set to be released Wednesday, faces uphill battle
Republican lawmakers reportedly are feeling more confident that President Trump has come around to supporting a tax bill crafted on Capitol Hill (with the help of members of Trump’s administration Gary Cohn and Steven Mnuchin). Trump had misgivings about the proposed corporate tax rate not being low enough, along with a slight increase in the lowest rate, according to Axios.
With Trump’s likely backing, Republicans will still face a tricky balancing act to try to include their priorities into budget reconciliation legislation that only allows for US$1.5 trillion in tax cuts. The list of tax breaks long-sought by the GOP include a repeal of the estate tax, the alternative minimum tax, expansion of write-offs for business investments, as well as a reduction in taxes on US corporate foreign profits.
All told, the shopping list totals about US$5 trillion in cuts, according to the Wall Street Journal, a tall order considering the US$1.5 trillion benchmark reached by Republican Senators on the Budget Committee.
The tax bill may also see challenges to its proposed elimination of state and local tax deductions, Bloomberg reports, with some 52 Republican lawmakers facing elimination of tax breaks for their districts.