The Senate tax bill will delay the corporate rate cut to 20% until Jan. 1, 2019, according to Sen. Bill Cassidy, a Louisiana Republican. The move would defy President Donald Trump’s insistence that the cut from its current 35% rate take effect immediately.
Treasury Secretary Steven Mnuchin said in a Bloomberg TV interview Wednesday that the administration’s “strong preference” is for the relief to start in 2018. Still, Mnuchin declined to say that a phase-in of corporate tax cuts was completely off the table. The House GOP tax bill calls for an immediate corporate cut to 20%.
“The longer we wait, the worse it is for the economy and making companies competitive,” Mnuchin said.
The Senate bill will also keep all seven tax brackets, Cassidy said. It doesn’t keep the top rate at 39.6%, he said. The House bill condenses seven income tax rates to four, with a top rate of 39.6% for those earning more than $1 million.
The new top individual tax rate in the Senate plan is to be determined, according to Sen. Rob Portman, an Ohio Republican. Asked whether the bill includes a repeal of state and local tax deductions, Portman said that was still being discussed.