President Trump's proposal for an overhaul of the tax system will include huge tax cuts for business and more moderate ones for individuals. Under the plan, the top corporate tax rate would be reduced from 35 percent to 15 percent, and the top rate for small business owners would drop from 39.6 percent to 15 percent as well. The top tax rate for individuals would be cut from 39.6 percent to the "mid-30s," according to AP, which cited someone with knowledge of the plan.
The plan could potentially add trillions of dollars to the deficit over the next decade, however Republicans, include those who blasted then President Barack Obama over the national debt, said they were open to it, arguing that the tax cuts would stimulate economic growth that would reduce or even eliminate the drop in tax revenue. However, the nonpartisan Joint Committee on Taxation didn't agree, saying yesterday that a big cut in corporate taxes, even a temporary one, would add to long-term budget deficits.
Whether there should be a corporate tax cut may not turn out to be the issue so much as how much it should be. Democratic Senator Bob Casey of Pennsylvania said, "There's no question we should try to reduce [the corporate tax rate], but I don't see how you pay for getting it down that low. Fifteen percent, that's a huge hole if you can't make the math work." Republican Senator Orrin Hatch of Utah, who chairs the Senate Finance Committee, wasn't that concerned about the deficit, saying, "I actually believe it could stimulate the economy and get the economy moving." But he was more non-committal on the percentage of the cut, saying, "Now, whether 15 percent is the right figure or not, that's a matter to be determined."