Senate Republicans on Thursday plan to propose delaying a cut in the corporate tax rate from 35 percent to 20 percent until 2019, four people briefed on the planning said, a major departure from President Trump’s insistence on immediate changes that he says are necessary to spur the economy.
Some Senate Republicans objected internally to the one year delay, but they were overruled.
To try to prevent companies from waiting until 2019 to invest, Senate Republicans will propose to allow companies to immediately deduct all capital investments in 2018 to incentivize them to spend more money immediately, the people said.
The four people spoke on the condition of anonymity because they were not permitted to disclose sensitive deliberations.
The one-year delay would lower the cost of the tax cut bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes. But it could also delay decisions by companies to move back to the United States from overseas or have companies hold off on other decisions as they wait for the corporate rate to fall.
The Senate approach is much different than House Republicans are taking. They are advancing a bill that would lower the corporate tax rate in 2018. But they are also having problems dealing with the total cost of their bill, which has ballooned beyond the $1.5 trillion price tag they were permitted under budget rules.
Treasury Secretary Steven Mnuchin said in a Bloomberg interview Wednesday that the White House’s “strong preference” would be for the tax cut to go into effect next year, but the White House is not expected to threaten blocking the bill over this change, the people said.
Senate Republicans plan to introduce their tax cut bill later on Thursday.
Some Senate Republicans objected internally to the one year delay, but they were overruled.
To try to prevent companies from waiting until 2019 to invest, Senate Republicans will propose to allow companies to immediately deduct all capital investments in 2018 to incentivize them to spend more money immediately, the people said.
The four people spoke on the condition of anonymity because they were not permitted to disclose sensitive deliberations.
The one-year delay would lower the cost of the tax cut bill by more than $100 billion, and negotiators are trying to preserve as much revenue as they can for other changes. But it could also delay decisions by companies to move back to the United States from overseas or have companies hold off on other decisions as they wait for the corporate rate to fall.
The Senate approach is much different than House Republicans are taking. They are advancing a bill that would lower the corporate tax rate in 2018. But they are also having problems dealing with the total cost of their bill, which has ballooned beyond the $1.5 trillion price tag they were permitted under budget rules.
Treasury Secretary Steven Mnuchin said in a Bloomberg interview Wednesday that the White House’s “strong preference” would be for the tax cut to go into effect next year, but the White House is not expected to threaten blocking the bill over this change, the people said.
Senate Republicans plan to introduce their tax cut bill later on Thursday.