Trump plans to slash corporation tax rate to 15%

The Trump administration is seeking a dramatic reduction in the rate of corporation tax to 15 per cent, a White House official said, as the president seeks to accelerate growth by easing burdens on US business.

That rate would be lower than the corporation tax rate being sought under plans developed by House Republican leaders, but it mirrors Donald Trump’s campaign goals to more than halve corporation tax from the current 35 per cent.

The proposed reduction comes as the administration places a higher priority on easing taxes than on curbing the US budget deficit. As such, it will encounter a rocky reception among fiscal conservatives in Congress, who worry about America’s escalating public debt and will be the arbiters of what tax legislation is proposed and passed. Steven Mnuchin, the Treasury secretary, has suggested that tax reductions would pay for themselves by galvanising higher growth and generating fresh revenue for the government.

Mr Mnuchin told the Financial Times last week that so-called dynamic models for scoring tax changes could show an extra $2tn of revenue under differing growth assumptions, saying the impact of growth of around 3 per cent was “staggering”.  The administration’s tax-cutting plans may show an increased budget deficit under static models that do not account for the impact of higher growth on tax receipts, Mr Mnuchin has added.

Mr Trump last week sought to accelerate the release of the administration’s tax plans after weeks of uncertainty, saying that an announcement would come on Wednesday. The White House official said Mr Trump’s team had looked at a range of options before settling on the 15 per cent rate.

However, a detailed tax blueprint is not expected this week, with Mick Mulvaney, the president’s budget director, saying a complete proposal will not be ready until June

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