The two tax bills passed by the House and Senate in recent weeks shared one key component: The corporate tax rate would be lowered from its current 35% rate to 20%.
That principle is now up for debate.
As the House and Senate work to hammer out a compromise bill, the corporate rate may be shifted up to 22% to preserve a little more revenue — still a dramatic decrease from the current rate, but not as steep as what Republicans previously agreed on.
The potential change is being deliberated even as few of the lawmakers in charge of ironing out the differences between the House and Senate bills support a hiked rate.
"I think the distribution of challenges of increasing the corporate rate is real, therefore I’m likely to advocate keeping it where it is," Sen. Tim Scott, a member of the conference committee tasked with coming up with a compromise bill, told reporters Thursday.
The idea for a 22% rate, it seems, came from President Trump. Hours after the Senate passed its bill Saturday, the president told reporters of the rate, "It could be 22% when it all comes out, but it could also be 20%."
“Fifteen is better than 20, 20 is better than 22 and 22 is better than what we have,” White House Press Secretary Sarah Huckabee Sanders told reporters at Thursday's briefing.
"I don think people think it’s a good idea," Sen. Rob Portman, another conference member, said of the increased rate. "But, on the other hand, there’s revenue concerns. I think we’ll be able to work through it." When asked directly if he thinks the conference can keep the corporate rate at 20%, Portman said, "I hope so."
Sen. Orrin Hatch, the influential head of the Senate Finance Committee and a conference committee member said Wednesday that "there is a drive" to go to a 22% rate, but that he personally opposed it.
The hike may be a way for legislators to gin up enough revenue to scrap some elements of the Senate bill that have driven opposition from business groups, like the inclusion of the corporate alternative minimum tax, which the House got rid of entirely. The corporate AMT, which was put back into the Senate bill soon before it was voted on Saturday morning, might end up functionally eliminating many popular deductions that corporations want to hold on to.
Several House Republicans have also said they want to expand the types of state and local taxes that can be deducted by taxpayers. In the Senate and House bills, individuals can deduct up to $10,000 worth of property taxes against their income tax bill, but they can't deduct state income taxes.
One key senator who was actually positive about a 22% corporate rate is not in the conference committee, Senate leadership, or the chair of a tax or budget committee, but has exercised lots of influence over the process: Maine Sen. Susan Collins.
"I think 22% is a reasonable figure," she said Thursday, noting that she had proposed earlier in the process to set the rate at 22%.
Collins' decision to back the bill the Senate passed over the weekend helped push it over the line, and a change in her support could wound the eventual conference bill's chances of final passage.
But while the conference committee members seem to at least be entertaining the possibility of a higher corporate rate — if a bit reluctantly — some in the Senate rank and file are more skeptical.
"The purpose of this conference is to work between those two decisions to find the differences and mold those into a final bill that both the House and the Senate can vote on," said Sen. David Perdue. "My question for this body is, and for this conference, is what's between 20% and 20%, Mr. President? I don't quite understand this."