President Donald Trump's plan to slash the corporate tax rate to 15% is setting up a showdown with House Speaker Paul Ryan, who has called for a tax plan to pay for itself.
Trump intends to lay out broad tax principles on Wednesday, including cutting the federal corporate tax rate to 15% from 35%, a White House official said. A rate that low would make it difficult to find ways to increase revenue or eliminate deductions to offset it, which means a plan wouldn't be revenue-neutral, or permanent.
The Ryan-backed House GOP blueprint released in June calls for replacing the 35% rate with a 20% rate applied to companies' domestic sales and imported goods, while exempting their exports. Ryan has questioned whether a 15% rate can realistically be paid for, and he and Kevin Brady, chairman of the tax-writing House Ways and Means Committee, have said they're committed to revenue neutrality.
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