President Donald Trump has again indicated that he wants a "phase two" of tax cuts to follow the major overhaul that the GOP passed in December. Last year, Republicans successfully enacted a bill that slashed the corporate tax rate from 35% to 21%, resulting in billions of dollars in savings for America's largest and most powerful corporations across industries such as finance, manufacturing, retail and transportation. (See also: The Biggest Corporate Winners From Trump Tax Deal.)
On Monday, during a visit by baseball's Houston Astros to the White House for a celebration of their World Series win, the president asked Rep. Kevin Brady, who represents a district north of Houston, whether he planned to reduce taxes even more. Brady attended the event alongside other Texans GOP Sens. John Cornyn and Ted Cruz.
"Kevin, are we going for an additional tax cut, I understand?" Trump asked. "Huh? He's the king of those tax cuts, yeah? We're going to do a phase two, I'm hearing that. You hear that, John and Ted? Phase two. We're actually very serious about that, Kevin. So, it's good." The remarks follow what was previously viewed as a joke from Trump while speaking to GOP lawmakers last month.
Tax Overhaul Brings M&A Bids to Highest Level in Decades, Doubles Share Buybacks
Massive corporate tax cuts, which have incentivized repatriation of billions in cash holdings overseas from companies including tech titans Apple Inc. (AAPL), have also ignited concerns over growing budget deficits, technical glitches and loopholes. There has been no signs of a major push among GOP leadership for a second tax bill, only immediate discussions regarding a technical correction bill.
The GOP tax overhaul has been highlighted as a major win for corporations, bringing bids for mergers and acquisitions (M&A) so far in 2018 at their highest level since the beginning of the millennium at $325 billion. Cash flowing back to investors via buybacks has also reached record levels, exceeding $200 billion in the three months leading to the end of February. Many see the savings as set to benefit shareholders rather than redistribute to the public through higher wages and increased capital investment. (See also: Share Buybacks Double Under Trump Tax Plan.)