President Trump said Thursday that he is working with Democrats to extend and strengthen the 2017 tax cuts. This is one of the top legislative priorities for Republicans, who are divided on many of the law's broad provisions.
During an event in Davos, Switzerland, President Trump said that passing a major new tax bill would be difficult for Democrats to pass, even though Republican lawmakers are trying to advance their agenda through a budget that allows them to bypass Democrats. He suggested that it depends on support.
“We are working with Democrats to extend the original Trump tax cuts,” Trump said at a meeting with CEOs and investors.
“When we do the Trump tax renewal, [cuts]must be approved by the Democratic Party. “If Democrats don't approve it, I don't see how they can survive with a tax increase of about 45%,” he said.
President Trump has said he wants to lower the corporate tax rate for companies that make products in the United States from 21% to 15%, the level set in the 2017 Tax Cuts and Jobs Act.
He also called for another cut in the personal income tax rate, which is set to expire at the end of this year without action from Congress.
President Trump's comments raised questions about how Republicans intend to advance tax policy in line with the rest of the party's agenda.
Republicans plan to use the budget reconciliation process to pass their legislative agenda without needing Democratic support. The budget reconciliation bill can pass the Senate with a simple majority, avoiding the Democratic filibuster or the potential need for concessions.
The president and some Republicans are pushing for the tax cuts to be included in a major bill that also includes energy, immigration and defense policies. But leading Republican senators are proposing introducing energy and immigration legislation first to secure early wins before moving on to the tax bill.
While some Democrats may lean toward bipartisan support for the tax, it is unlikely that Republicans will get significant bipartisan support for other policies that might be included.
There is also tension within the Republican Party between budget hawks who want deep spending cuts to accompany the tax cuts and other members of the conference who are primarily focused on extending tax cuts.
Republicans also expressed a wide range of views on controversial provisions such as the state and local tax (SALT) deduction cap, which Republicans capped at $10,000 in 2017, and the Green Energy Credit in Democrats' Inflation Control Act (IRA). I have it.
Republicans in high-tax blue states hate the SALT cap, but many Republicans support the impact the IRA credit has on local economies and don't want to eliminate it.
Democrats have expressed some interest in working with Republicans on tax cuts, including House Majority Leader Hakeem Jeffries (Calif.) and Ways and Means Committee member Rep. Gwen Moore (Wisconsin).
Moore told The Hill that Democrats are interested in research and development tax credits, and Jeffries specifically expressed support for low-income housing tax credits.
