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Tax Reform Fight Brewing Over Trump's Favorite Deduction

Image: Tax Reform Fight Brewing Over Trump's Favorite Deduction
(AP)

By    |   Monday, 15 May 2017 10:39 AM

The next heavyweight fight between House Republicans and the White House could come over a $1 trillion favorite tax break of President Donald Trump's, Politico reported.

While everyone is in lock step in reducing the corporate tax rate at least to 20 percent (though Trump wants 15 percent), there promises to be an imbroglio over how to pay for it, according to Politico's report.

Some Republicans are eyeballing the deduction for businesses' interest expenses as a key offset, but there's one problem — that tax break has been a lynchpin of Trump's in the building of a his real-estate empire.

At the center, again, is House Speaker Paul Ryan whose calling for eliminating interest deductibility, a move that would generate $1 trillion over 10 years.

"It's controversial," Texas Sen. John Cornyn told Politico. "I think we need to be careful because there are a lot of businesses that borrow money as part of their business model."

Farmers, private equity, utilities, manufacturers to name a few others, Politico reported.

But real estate is the one near and dear to the heart and pocketbook of Trump.

"Trump didn't like it because he's a real estate guy, and a lot of real-estate deals are financed with debt so he squashed the idea," former tax adviser Stephen Moore told Politico.

At issue is the deficit. Slashing the corporate tax without an offset would negatively impact the deficit.

Trump and Treasury secretary Steve Mnuchin told The Economist last week their "preference" is to keep the tax break in place.

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Politics
The next heavyweight fight between House Republicans and the White House could come over a $1 trillion favorite tax break of President Donald Trump's, Politico reported.
tax break, trump, house, gop
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2017-39-15
Monday, 15 May 2017 10:39 AM
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