President Trump on Saturday suggested for the first time that he would consider significant changes to the emerging tax overhaul plan, including setting the corporate tax rate at 22 percent — a rate higher than the level he had long demanded as the House and Senate crafted their legislation.
Early Saturday morning, the Senate narrowly passed a bill that would slash corporate tax rates from 35 percent to 20 percent starting in 2019. Several Republicans had tried to get GOP leaders to allow the corporate rate to settle at 22 percent in exchange for other tax breaks for families, but GOP leaders held the line at 20 percent, in part because Trump had said he would not allow it to go any higher.
But less than 12 hours later, as Trump was traveling to New York, he told reporters that he might accept 22 percent.
“Business tax all the way down from 35 to 20,” Trump told reporters, remarking on one of the elements of the Senate bill. “It could be 22 when it all comes out but it could also be 20. We’ll see what ultimately comes out.”
Every one percentage point change in the corporate tax rate is the equivalent of roughly $100 billion in revenue over 10 years. So moving the rate up two points would free up roughly $200 billion in revenue.
Sen. #Ron Johnson (R-Wis.) had proposed setting the rate at 22 percent to allow the tax cuts to kick in next year and not delay the cut until 2019. But Trump is also under considerable pressure from donors to lower the top tax rate paid by wealthy individuals. Their tax rate did not fall much in the House and Senate tax overhaul plans, which led to griping and complaints from wealthy GOP campaign contributors.