Speaking to reporters on Saturday just hours after the tax reform bill was passed by Senate in a tight 51-49 vote, President Trump said that he may consider reducing the rate cut to make it 22 percent instead of 20 percent.
“Business tax all the way down from 35 to 20. It could be 22 when it all comes out, but it could also be 20. We’ll see what ultimately comes out,” Trump told reporters.
Why would this potentially complicate the bill’s passage?
First of all, the proposed 20 percent tax corporate rate has been a contentious part of the bill. Republican Senators and House representatives have both fought hard to keep the rate at 20 percent.
In fact, the Senate even rejected a Republican-backed proposal to take it up to 21 percent so more tax breaks could be introduced for working families.
Sen. Marco Rubio (Fla.) argued that the bill should do more for low-income families, but said on Friday that his colleagues acted as if it would be a “catastrophe” if they accepted his proposal to up the corporate tax rate to 20.94 percent, which would remove about $200 billion in tax relief and lessen the burden on the federal deficit.
The tax cut for corporate entities is still hanging on tight at 20 percent with the majority of Republicans fully behind it, but Trump’s statement could now complicate the issue if he pursues the 2 percent reduction in the tax cut.
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