- Kevin Lamarque/Reuters
- Republicans are considering a five-year phase-in of a cut in the corporate tax rate as part of their bill, according to a Bloomberg report. The proposal would lower the federal corporate rate by 3 percentage points per year through 2022 to get to a 20% target. This could help lower the amount the bill , a key procedural concern.
The plan under consideration would reduce the federal corporate tax rate by 3 percentage points per year from 2018 to 2022, eventually bringing the rate down to 20% from the current 35%, according to Bloomberg’s Jennifer Jacobs, Anna Edgerton, and Sahil Kapur.
A phase-in of the corporate rate would theoretically help the bill’s budget math. The Republican budget resolution only allows the tax plan to add $1.5 trillion in federal deficit over 10 years if Republicans use budget reconciliation to pass the measure.
An analysis from the Tax Policy Center found that the current plan, the unified framework unveiled by the White House and congressional GOP leaders, would add $2.4 trillion to the deficit.
Slowing the speed of the corporate tax cut would likely result in a smaller deficit increase and help the bill fit within the $1.5 trillion window.
But a slow phase-in would also likely slow the economic impact of the tax bill. The Trump administration has long touted the potential economic impact of slashing the corporate tax rate, saying it would help pay for the bill and be a boon for American workers.
According to the report, the idea is still under consideration and could be tweaked before the release of the full tax reform bill on Wednesday.
A spokesperson for the Ways and Means committee did not immediately respond to a request for comment.