White House Says It Is Not Backing Corporate Tax Cut Phase-In

The Associated Press

The White House said on Monday it is not supporting a proposal to phase in cuts to the corporate tax rate.

“The president has laid out his principles and it doesn’t include the phasing in,” White House spokeswoman Sarah Sanders said.

Sanders was responding to a question based on a Bloomberg story that reported that Republicans on Capitol Hill are discussing phasing in tax-rate cuts over a five year period, so that the corporate rate would come down to the Trump administration’s stated target of 20 percent by 2022.

U.S. stocks fell on the news, and Treasuries pushed higher. Stocks have been bid up in anticipation of tax cuts, which would directly increase the after-tax profitability of many U.S. corporations.

Treasury Secretary Steven Mnuchin seemed less definitive on the potential for a phase in. “The objective is not to have that phase in, but we will see how that goes,” Mnuchin said in an interview, according to Bloomberg.

Bloomberg reported that two Republican members of the House Ways and Means Committee, David Schweikert of Arizona and Devin Nunes of California, said they wanted to see “how the math worked” before taking a position on the phase-in. A phase-in could be used to limit the cost of the tax cut, easing concerns that cuts could lead to much larger budget deficits.

The contradictory reports once again raise the prospect that Republicans are less unified on the details of the tax overhaul than they have maintained in public. Lawmakers are also said to still be considering lowering the cap on contributions to 401(k) retirement plans, another change that President Donald Trump has said he does not support.

The  Ways and Means Committee plans to release the text of a tax reform bill on Wednesday.

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