President Donald Trump has promised the largest tax cut inhistory, but for scores of the biggest U.S. corporations, it mightbe just a tax nick.

Constrained by congressional rules, political concerns andsimple arithmetic, Republican leaders in Washington have yet toannounce any consensus on how to finance the deep corporate tax cutthey want, beyond vague plans to close off business-relatedloopholes.

But making comparatively narrow changes to the tax code won'tput much of a dent in the 35% corporate rate, taking it only as lowas 28% or so, according to three tax experts who've run thenumbers. That's almost double the 15% rate Trump has proposed andwell above the 20% that House Speaker Paul Ryan has suggested.

Trump's White House has promised an agreed-upon plan by earlySeptember. But with no details emerging from weekly, closed-doortax meetings between his advisers and congressional leaders, taxprofessionals and policy analysts have begun to fear that ashallower cut is the most likely outcome. That would jeopardizeTrump's goal of spurring job creation and economic growth, and dolittle to prevent U.S. companies from shifting their income and taxliabilities offshore to lower-tax countries, economists say.

The rates that Trump and Ryan want are “almost certainly a pipedream,” said David Rosenbloom, an international tax lawyer atCaplin & Drysdale who served in the Treasury Department from1978 to 1981. “They don't know how to pay for a cut of thatmagnitude.”

Both men have pitched their rate-cut plans as a way to spurhiring and economic growth. But setting a 28% tax rate would belargely meaningless for more than 150 of the largest U.S.companies, which already paid lower rates than that from 2008through 2015, according to a recent study.

The companies took advantage of features of the tax code thatallow for aggressive tax avoidance as well as tax “subsidies,”according to a March 2017 report by the Institute on Taxation andEconomic Policy, which gathered data from public disclosures. IfCongress does close loopholes to pay for a lower rate, many suchbreaks would disappear.

“These corporate tax rate cuts appeal to the business communityin the abstract, but when you talk about what tax subsidies have tobe given up, that changes very quickly,” said Chuck Marr, directorof federal tax policy at the Center on Budget and Policy Prioritiesin Washington.

To be sure, potential revenue-raisers could make their way intofinal legislation — helping to pay for steeper cuts. Ryan'scontroversial border-adjustment concept and his proposal to end thedeductibility of corporate interest payments would each raise $1trillion or more over a decade, but both have run into significantpolitical opposition.

If neither provision survives, the corporate tax cuts that Ryanand Trump have proposed are “unrealistic,” said economist AlanViard of the American Enterprise Institute.

Temporary Cut

Given the difficulties, Congress could abandon the goal ofrevenue-neutral tax legislation, but that move would create otherissues. To get around a lack of Democratic support, SenateRepublicans have said they plan to use a legislative maneuver thatallows for passing a bill with a simple majority. Under thatprocedure, any provisions that would expand the long-term federaldeficit would have to be only temporary.

A temporary cut would most likely spur companies to make biggerpayouts to shareholders, not hire new workers, said Alan Cole, aneconomist with the Tax Foundation in Washington. Likewise, apermanent, but shallow, cut wouldn't send most multinationals onhiring or investing sprees, he said — “though there's alwayssomeone at the margin” that might benefit and reinvest.

Corporate executives aren't interested in temporary changes. TheBusiness Roundtable, a lobbying group made up of CEOs, wants“permanent, fundamental reforms that will accelerate growth bigtime and boost all Americans,” said Matt Miller, a vice presidentfor the organization.

Similarly, Ryan's office said in a statement Thursday that atemporary rate cut could actually result in economic decline ratherthan growth.

Some members of Congress have proposed a way to extend the lifeof temporary cuts — by changing congressional rules to expandthe “budget window” that applies to deficit-increasing provisionsfrom the current 10 years to as many as 30. Such a move comes withprocedural challenges and political risks, according to budgetexperts.

Magic Number

From an international perspective, the magic number for the U.S.corporate tax rate to hit is roughly 24% — about the averagerate among countries in the Organisation for Economic Co-operationand Development, said Elaine Kamarck, a senior fellow at theBrookings Institution.

Getting below that number would help persuade U.S. companies tostop shifting profits offshore, said Kamarck, a co-chair of theRATE Coalition, a tax-focused group whose members include Aetna,Boeing, Raytheon and Wal-Mart.

The U.S. is the only industrialized country that taxes itscompanies on their global profits, no matter where they're earned.But the federal tax code allows companies to defer paying taxes onoverseas income until those earnings are brought home to the U.S.The deferral rule has helped result in U.S. companies' shiftingprofit to their overseas subsidiaries in low-tax countries —often through debt transactions or intellectual-property licensingdeals — and leaving it there. In all, U.S. multinationalshave amassed an estimated $2.6 trillion in untaxed, offshoreprofit.

Simply cutting the corporate tax rate wouldn't address thestructural incentives for such profit-shifting, but Ryan arguesthat the border-adjusted tax plan would. Instead of trying to taxcompanies' global income, it would more closely resemble a tax ontheir U.S. sales — reducing the incentives to send profitoffshore, proponents say. Still, some experts have questionedwhether the change would end the practice fully.

During an address that his office billed as Ryan's first majortax speech last week, he suggested that he remains committed totrying to prevent the offshoring of both corporate income and jobs.“The bottom line here is this: We cannot accept a system thatperpetuates the drain of American businesses overseas,” hesaid.

2012 Plan

Trump has been far less vocal about structural changes — orfinding ways to pay for deeper cuts. The one-page outline that hisadministration released in April made an oblique call foreliminating “tax breaks for special interests” and “targeted taxbreaks that mainly benefit the wealthiest taxpayers.”

Eliminating 54 corporate tax breaks currently embedded in thetax code — such as domestic-production deductions andlow-income housing credits — would generate enough revenue tocut the corporate rate to 28.5%, according to Scott Greenberg, asenior analyst at the Tax Foundation.

That figure squares with efforts made during former PresidentBarack Obama's administration. Treasury Department officials foundin 2012 that the lowest rate they could propose without adding tothe deficit was 28%, said Mark Mazur, a former top tax official inthe department.

For multinationals, 28% “is not something they'd say, sign me upfor that,” said Mazur, now the director of the Urban-Brookings TaxPolicy Center.

Caplin & Drysdale's Rosenbloom agreed. “I suspect that a 28%rate will please no one,” he said. His view of the talks underwayin Washington was dimmer still: “When all is said and done, there'sa lot more said than done.”

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