House Republicans are considering phasing out a reduction of the corporate tax rate as one way to help shore up additional revenue in the latter years of the ten-year budget window, according to sources with knowledge of the discussion.
President Donald Trump and the GOP were hoping to immediately decrease the corporate tax rate to 20 percent. But key mechanisms to help offsets those cuts — such as eliminating the state and local tax deduction — have been watered down.
Now, Republicans are considering bumping the corporate tax rate up to 22 percent in year ten, and back up to 35 percent — the current rate — after that year, a source said.
A spokeswoman for the House Ways and Means Committee did not immediately respond to a request for comment.
The GOP grapples with how to find new revenue to match the corporate and individual tax cuts throughout the bill. Some revenue raisers that had been under discussion — like lowering the amount of deferred tax income that can be put into retirement accounts — are also now off the table, sources said.
Phasing out the corporate tax rate cut would free up additional revenue later in the 10-year window and put pressure on a future Congress to make those cuts permanent.
Negotiations remain ongoing and changes are still expected despite the anticipated release of legislation tomorrow.