President Trump keeps pushing for the corporate tax rate to be cut from 35 percent to 15 percent — a number he campaigned on — even as his advisers tell him that number can’t work. The “Big Six” team of White House and Congressional tax negotiators has reportedly set its sights on a rate between 20 percent and 25 percent.
“You can’t get to 15 percent, and anyone who has a back of an envelope can make that calculation,” one senior official working on tax reform told Politico. “And he may not like that truth, but it’s the truth. It’s just math.”
Trump’s push faces another hurdle: popular opinion. A new poll by Politico and Morning Consult shows that most voters don’t think corporations need a big tax cut right now. About 60 percent of respondents said corporations pay too little in taxes, while only 34 percent agreed with Trump’s proposal to reduce the corporate tax rate from 35 percent to 15 percent.
The survey results are consistent with earlier data: A Gallup poll in April found that 67 percent of American adults say that corporations pay too little in taxes.
Taken together, the data suggests that both the president and Republicans seeking a 20 percent top corporate rate will have trouble generating much enthusiasm for a big corporate tax cut this fall.
Voters’ views on small business are notably different. About two thirds of respondents agree with the proposal to allow small business owners to pay a 15 percent tax rate, a big drop from the top personal tax rate of 39.6 percent that small business owners currently face.
The earlier Gallup poll may help explain the difference. Fifty-one percent of respondents in the Gallup poll said that “middle-income people” currently pay too much in taxes, and the same percentage said that small businesses pay too much in the new Politico/Morning Consult poll. It may be that most Americans see small business owners as part of an overtaxed middle class.
Tax reformers will likely also face pushback as they look to eliminate deductions to offset the cost of lowering personal tax rates. The new poll found that just 40 percent backed eliminating itemized deductions besides those providing breaks for homeownership and charitable donations.
The Politico/Morning Consult survey of 1,993 voters was conducted between August 31 and September 3.