Conservatives are drawing a red line that could doom the GOP's tax reform efforts

WASHINGTON — Republicans are considerably more optimistic about party unity in reforming the tax code compared to the several failed attempts to repeal and replace Obamacare.

But a battle over the corporate tax rate still looms on the horizon, threatening the GOP’s efforts at passing significant legislative achievement this year.

During a forum with conservative lawmakers on Tuesday morning, House Freedom Caucus Chairman and North Carolina Rep. Mark Meadows said any corporate tax rate above 20% could be a deal breaker.

“If the corporate rate is above 20% and if the small business rate is above 24% I would vote against it,” Meadows said, clarifying that his position was not representative of the entire Freedom Caucus.

However, others in the ultra-conservative faction of Republican lawmakers drew the same line in the sand on the corporate rate.

Virginia Rep. Dave Brat told the Washington Examiner that 20% was his limit. Texas Rep. Louie Gohmert did not draw a red line, but expressed fears that the Republican leadership would hike it up from the desired sub-20% rate.

“I told the president over and over he ought to stick with 15 so that he shouldn’t have Ryan and McConnell talk him up,” Gohmert said. “I want it to be 15, we’ll see after that.”

Later on Tuesday, Meadows told Business Insider that “at this point we need to be aggressive in our tax reform” but that the caucus would craft an official position at a later date.

Outside the Freedom Caucus, House Republicans were coy about conservatives’ rate flexibility. House Budget Committee Chairwoman Diane Black told Business Insider she thinks that 20% is a realistic goal, but added that a conversation will still need to take place.

“At the end of the day, they’re going to feel pretty good about what we’ll put out,” Black said.

Louisiana Rep. Mike Johnson told Business Insider that 20% or a slightly higher rate was a realistic goal. Johnson suggested that conservatives might be taking a hard stance now so the result is lower post-negotiations.

“I think all that’s important in the negotiation process for people to stake out their ground,” he said. “I think there’s concern that if the red line is higher than that, then you wind up much higher.”

Ohio Rep. Jim Renacci, who sits on the House Ways and Means Committee, told Business Insider he is optimistic the Freedom Caucus will get a lot of their demands because they are in line with the President Donald Trump’s goals.

Trump has repeatedly called for a 15% corporate rate, but if the House’s most conservative Republicans are staking out 20% as their max, then his desired number might be entirely unattainable.

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