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Trump wants to cut taxes. Exactly how depends on your audience.
Donald Trump painted somewhat different pictures to different audiences on Thursday about how he would cut taxes if he wins in November.
Before a closed-door meeting of CEOs, he presented an idea to reduce the corporate tax rate to 20% from its current level of 21%. The former president’s statements were first reported by the New York Times and confirmed to Yahoo Finance.
But that morning, before an audience of House Republicans, according to participantsTrump has floated another idea: dismantling the entire U.S. income tax system in favor of higher rates.
Perhaps not surprisingly, Trump does not appear to have repeated his “all tariffs” idea to business executives. The reception, if that were the case, would undoubtedly have been cooler, with tariffs representing a tax that companies pay when importing goods.
The two journalistic ideas Trump laid out on Thursday are not irreconcilable — he could pursue both if elected — but the sequence was emblematic of his overall approach to the campaign on tax issues.
He often throws out seemingly spontaneous ideas favored by the audience in front of him. Where Trump is consistent is in focusing heavily on lower individual and corporate tax rates, but a different approach to business rights.
Former President Donald Trump during his visit Thursday to Washington, D.C. (AP Photo/Jacquelyn Martin) (ASSOCIATED PRESS)
One attendee added Thursday that Trump offered support for different levels of corporate tax rates in his comments to CEOs. The former president focused on a 20% rate, but also mentioned 15%, a number he had previously defended.
Trump liked the 20% level, according to the CEO, in part because it was a “round number.”
President Biden was also invited to speak to CEOs this week, but he was traveling in Europe. In his place, he sent White House chief of staff Jeff Zients, who told the audience that Biden wanted to be there.
Taxes also came up in that conversation, according to a person familiar with the meeting, with Zients acknowledging a White House plan to potentially raise corporate taxes above 21% but underscoring the need to keep the U.S. competitive by doing so. it.
Zients is himself a former business executive and often a Biden emissary to corporate America.
He presented to the assembled business CEOs that Biden’s policies, from government support for specific infrastructure and sectors to respect for international norms and global alliances, are more important to the economy’s well-being than a tax cut.
White House Chief of Staff Jeff Zients arrives for an event on artificial intelligence at the 2023 White House in Washington. (AP Photo / Evan Vucci) (ASSOCIATED PRESS)
Help for corporate results
Trump’s ideas on corporate taxes have been praised by some conservative advocates, with some trying to frame a cut for American businesses as something that would help ordinary citizens.
The story continues
Grover Norquist, president of Americans for Tax Reform, said in a statement that “workers, retirees and families pay corporation tax” and such a measure “reduces the tax burden on the middle class and creates jobs and growth”.
It is also a measure that – if it happens – would also have an economic impact.
Garrett Watson, senior analyst and modeling manager at the D.C.-based Tax Foundation, told Yahoo Finance on Friday that an adjustment in the corporate tax rate to 20% would increase GDP by about 0.1% — but also It could further raise the national debt if it is not offset by spending cuts.
Such a measure would cost about $114 billion over the next decade, Watson said, but would help the U.S.’s global competitiveness in terms of attracting business activity.
He added in a note that “corporate taxes are some of the Most Harmful Types of Revenue Generators for economic growth, so relying less on corporate taxes could be helpful in encouraging greater growth in the long term.”
But lowering corporate taxes is something Trump has been calling for for years and is unlikely to stop anytime soon.
In 2017, Trump-era tax cuts reduced corporate tax rates from 35% to 21%. But during these negotiations, Trump was a voice pushing for it to be reduced even further, to 15%.
Then-President Donald Trump with Vice President Mike Pence and House Speaker Paul Ryan during an event to celebrate the passage of the Tax Cuts and Jobs Act on the South Lawn of the White House in 2017. (Jabin Botsford/The Washington Post via Getty Images) (The Washington Post via Getty Images)
And he has been advocating low rates ever since.
In a 2023 NBC interviewTrump said of corporate rates “I’d like to lower them a little bit if we could,” but declined to demand a 15% rate, saying, “It depends on where we are at the moment.”
Trump has frequently touted his tax cuts in general when reaching out to wealthy potential donors.
A leaked video – which Democrats and the Biden campaign has appeared frequently in the months since — appears to show Trump at a fundraiser at Mar-a-Lago last December talking to a well-heeled audience.
“You are very rich,” he said in the clip, and added: “We are going to give you tax cuts.”
How the business world compartmentalizes Trump’s promises
Trump’s visit to Washington this week also highlighted a corporate approach to the Republican that often focuses on highlighting the business-friendly parts of his agenda while downplaying others.
Trump appeared before the Business Roundtable, a group that represents CEOs in Washington and has made tax reform and lowering rates a top priority for next year.
In a meeting with journalists earlier this week, Business Roundtable CEO Joshua Bolten downplayed Trump’s less business-friendly ideas, such as his determination to impose a 10% tariff on U.S. trading partners.
“We’re not looking at this as a package deal,” Bolten said. “We think taxes should be low and unjustified tariffs should not be implemented.”
President Joe Biden traveled to Italy this week to attend a G7 summit and meet with Italian Prime Minister Giorgia Meloni, right. (MANDEL NGAN/AFP via Getty Images) (MANDEL NGAN via Getty Images)
In a recent interview, a Northwestern University political scientist named Jason Seawright, who co-author of a book about billionaires and politics offered a reason why business leaders could make this distinction.
He notes that the last time Trump was in power, what actually occurred was a wave of tax cuts as well as higher tariffs.
But these trade tensions ultimately didn’t throw the economy much off course.
“They think they managed things really well last time and they think they can do it again,” Seawright said.
Ben Werschkul is the Washington correspondent for Yahoo Finance.
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