President Donald Trump and House GOP tax writers had started the discussion on “Tax Cuts 2.0”. The next round of tax cuts will focus primarily on the individual side of the tax code, both Trump and House Ways and Means Chair Kevin Brady, Republican-Texas, reiterated to reporters at the White House meeting.
Individual Tax Cuts
The discussion between Trump and several top House GOP tax writers was set to focus, in particular, on how to further strengthen the economy post tax reform, Brady said. “We think the best place to start is with America’s middle class families and our small businesses,” he added. Brady has said that making permanent the individual tax cuts that are set to expire in 2026 under the Tax Cuts and Jobs Act (TCJA) is a top priority for Republicans.
Corporate Tax Rate
Trump is also calling for lowering the corporate tax rate to 20%. The corporate tax rate was lowered last December from 35% to 21% by the TCJA. Brady indicated that discussions between House GOP tax writers and the White House were continuing on the possible proposal. While Brady did not openly commit to the notion of further lowering the corporate tax rate, he did think that the president is right that global competitors will likely respond in kind to last year’s tax reform.
Tax Cuts 2.0 Timeline
The House is expected to vote on the Tax Cuts 2.0 package this month. Additionally, Brady stated that he anticipates the “Senate setting a timetable, as well.”
At this time, the Tax Cuts 2.0 package is not expected on Capitol Hill to fare well in the Senate. The package would need at least nine Democratic votes to clear the chamber.
“The GOP tax scam was a huge tax break for big corporations,” Senator Tammy Baldwin, Democrat-Wisconsin said. “We should reward work, not just wealth,” she added. While Democrats remain outspoken against the TCJA for primarily benefiting corporations, Republicans are hoping for Democratic support, just prior to midterm elections, on a measure that focuses on individual tax cuts.
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