Difficult to cut US corporate tax rate below 26 percent: study -

Difficult to cut US corporate tax rate below 26 percent: study

Credit: channelnewsasia.com

  • About: 7 days ago
  • 2 views

WASHINGTON: U.S. President Donald Trump and Republicans in Congress would have a hard time slashing the corporate tax rate to below 26 percent, even if they eliminated nearly every business tax preference, according to a study released on Wednesday.

The analysis by the Tax Policy Center, a nonpartisan think tank, found Republicans might have to expand the federal budget deficit to cut the corporate rate to Trump's proposed 15 percent or to the 23 percent level sought by leading tax policymakers from Congress and the administration.

The corporate income tax rate is now 35 percent, although many companies pay far less than that thanks to abundant loopholes.

"There's a lower boundary on this and it's much higher than what the president and congressional Republicans say," said Howard Gleckman, a senior fellow at the center.

"The most likely outcome is that they're not going to reduce corporate taxes as much as they'd like to," he said.

Republicans have vowed to slash business tax rates, saying it would boost economic growth and help create jobs.

Eliminating tax breaks are a main focus of closed-door negotiations on Capitol Hill and in the White House.

But no policymakers have gone as far as the Tax Policy Center did in its study, measuring the impact of throwing out hundreds of tax breaks, including subsidies for research, alternative energy, fossil fuels and domestic manufacturing.

“In a revenue-neutral bill, Congress can’t get the rate below 26 percent even if it eliminates nearly every corporate tax expenditure,” Gleckman said in a blog posting accompanying the study.

White House officials and conservatives in Congress, including Senator Ted Cruz, have called for deficit-funded tax cuts as a way to spur economic growth.

But analysts warn that expanding the deficit would undermine economic growth by raising the federal debt burden and forcing interest rates higher.

Gleckman said policymakers could pay for tax cuts by finding new sources of revenue to compensate for lower rates, rather than expanding the deficit. But Republicans have already rejected revenue-raising options, including a border adjustment import tax and a carbon tax.

The study was funded by the nonprofit Peter G. Peterson Foundation.

(Reporting by David Morgan; Editing by Kevin Drawbaugh and Peter Cooney)

Follow Us on Twitter

Related stories with Difficult to cut US corporate tax rate below 26 percent: study

Trump bars Chinese-backed firm from buying US chipmaker Lattice -World News
Trump bars Chinese-backed firm from buying US chipmaker Lattice 7 days ago
U.S. President Donald Trump blocked a Chinese-backed private equity firm from buying a U.S.-based chipmaker on Wednesday, sending a clear signal to Beijing that Washington will oppose takeover deals that involve technologies with potential military applic
Region must do more to pressure South Sudan leaders to end conflict -US diplomat -World News
Region must do more to pressure South Sudan leaders to end conflict -US diplomat 7 days ago
WASHINGTON: African countries should do more to pile pressure on South Sudan's political leaders, who seem incapable of resolving the country's four-year civil war, a top U.S. diplomat said on Wednesday. "We think there is more our African colleagues can
Child psychiatric disorders tied to in utero antidepressant exposure -World News
Child psychiatric disorders tied to in utero antidepressant exposure 7 days ago
(Reuters Health) - Antidepressant use during pregnancy is tied to an increased risk of psychiatric illnesses, especially mood disorders, in children, according to a new study. The overall risk is low, though. Only about 3 percent of the nearly 905,383 ch
Donald Trump Named The Most Anti-LGBTQ President In U.S. History -World News
Donald Trump Named The Most Anti-LGBTQ President In U.S. History 7 days ago
Measured by both actions and outcomes, it's a fact that is now undeniable.
The Hero Of 'Charlie And The Chocolate Factory' Was Originally Black -World News
The Hero Of 'Charlie And The Chocolate Factory' Was Originally Black 7 days ago
But Roald Dahl's agent persuaded him to make Charlie Bucket white.
Spain Catalonia: More than 700 mayors summoned to court -World News
Spain Catalonia: More than 700 mayors summoned to court 7 days ago
Prosecutors order council leaders to appear for questioning over the banned independence referendum.
One-Eyed Mike's is known for its Grand Marnier Club, but food deserves attention too -World News
One-Eyed Mike's is known for its Grand Marnier Club, but food deserves attention too 7 days ago
When we entered One-Eyed Mike’s in Fells Point on a recent Friday, we faced a raucous crowd of drinkers and a wall of Grand Marnier bottles in the narrow bar area. The restaurant claims to host the first and largest club dedicated to the French, ora
Ex-Navy commando, disabled after 26/11, finishes 72km Ladakh marathon to prove he is fit -World News
Ex-Navy commando, disabled after 26/11, finishes 72km Ladakh marathon to prove he is fit 7 days ago
32-yr-old Shaurya Chakra winner, former Marine commando, Praveen Teotia took 4 bullets during the operation to neutralize terrorists at the Taj Mahal Hotel in Mumbai in Nov 2008. After being given a non-active duty job by the Navy, Teotia set about tryin
More photos of the BMW i3 Facelift and i3s -World News
More photos of the BMW i3 Facelift and i3s 7 days ago
At the 2017 Frankfurt Auto Show, BMW presented the much anticipated 2018 BMW i3 Facelift showing off the new updates to keep the i3 fresh. … The article More photos of the BMW i3 Facelift and i3s appeared first on BMW BLOG