Trump's late push for huge new corporate tax cuts
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The Trump administration is pressing Congress to dramatically expand the number of business-friendly tax cuts in a budget bill that's already complicated and costly.
Why it matters: New additions, such as full expensing to build new factories in the U.S., are leading to confusion among senators and staffers on what President Trump absolutely must have in his tax bill, and how much it will ultimately cost.
- "Everything here comes down to, how do you pay for it and how does it fit into our other priorities?" Sen. Tom Tillis (R-N.C.) told Axios.
- "When we're having such a difficult time getting 'pay fors' for the other policies in the bill. We've got to have that discussion about timing and priority."
- "Members are concerned about the price tag for new items," said a Senate official.
Driving the news: Treasury Secretary Scott Bessent and White House National Economic Council director Kevin Hassett explained to House and Senate leaders — the Big Six — on Monday that Trump wanted the tax portions of the bill to focus on bringing manufacturing jobs back to the United States.
- The administration wants "deductibility for auto loans for American-made cars, and immediate expensing, 100% expensing for equipment," Bessent told reporters afterward.
- "And we are going to add factory structures for that also."
- On Tuesday morning at the White House, Bessent doubled down. "Bring your factory back, you can fully expense the equipment and the building," he said.
Zoom in: Some of the provisions Bessent mentioned to senators — like auto loan deductions — have been raised by Trump before, but many senators didn't think they were part of his core goals.
- They assumed Trump's priority was on extending his 2017 bill and then making good on core campaign promises, like ending taxes on tips, overtime pay and Social Security benefits.
- Sen. John Cornyn (R-Texas) told Axios he hasn't heard of the factory proposal, but said, "All this has a dollar impact. … Ultimately, we've got to get the president's signature. So we're going to have to accommodate what he wants."
- "It's one of the administration's best tax proposals," Sen. Ron Johnson (R-Wis.) said about the expensing proposal.
Between the lines: Bessent also told senators the administration wants to lower the corporate tax rate for U.S. manufacturers from 21% to 15%.
- Trump mentioned lowering the top rate during the campaign, but it wasn't a staple of his rallies.
- Most recently, White House press secretary Karoline Leavitt said the president had not made a decision on whether he wanted to raise it.
- Many senators assumed it would stay at 21%.
Zoom out: In the House, the focus is on finding enough programs to cut $1.5 trillion in spending, with some House moderates drawing redlines on Medicaid cuts.
