Just to make sure: for something to be "revenue neutral" means it can't contain a real reduction in tax revenue offset by a hypothetical gain through "dynamic effects" in the economy?
That's the plan though.
Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
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Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#12A largely meaningless figure without the included context about targeted cuts elsewhere. That said, corporate taxes[1] currently make up around 10% of the total US tax revenue, so major cuts (35% -> 15%) actually stand to result in a 4.2% drop in total US tax income. This assumes no positive change in corporate growth as a result of the reduced taxes. 1: http://www.taxpolicycenter.org/statistics/amount-revenue-sou...
You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country.
Something tells me the reality of this would not play out like planned.
In fact the whole lower the tax for X and have Y also benefits doesn't work!
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#13Just to make sure: for something to be "revenue neutral" means it can't contain a real reduction in tax revenue offset by a hypothetical gain through "dynamic effects" in the economy?
Secretary Mnuchin said that the plan is only revenue neutral if you used dynamic scoring
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#14I'm skeptical that tax reform has a better chance of making it through this Congress than ACA reform, but:
Can anyone comment on how a lower corporate rate would likely affect S corps and incentives to form them? Maybe a new 15% rate wouldn't apply to such firms, but if it did, wouldn't it represent a pretty big new benefit/loophole for incorporation?
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#15Republicans talk a big game of fiscal responsibility but when given the chance they do irresponsible things like this and Bush's extensive tax cuts for the wealthy that cost the rest of us billions by running up debt.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#16We don't know about the side effects yet, but a 15% corporate tax would be the starting signal for some entrepreneurial friends of mine to found a company in the USA the second the bill has passed. There is no other big market with such a low corporate tax.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#17Earlier quoted context omitted.
You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country.
>You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country They won't bring it back if they have to pay 15% on it. We let them bring it back for 5% in 2004 and the result was a net loss to the taxpayer, if I remember correctly. https://www.wsj.com/articles/SB10001424052970203633104576623..…
Had it not happened, the US government would have gotten 0% of the money and their US operations would have been even more cash-starved.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#18If only we can get an equivalent tax increase on a progressive capital gain tax system, it might even be a good thing.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#19No corporation with a good tax team pays anything more than 20% of taxes. This idea that 15% is going to really be THE thing that spurns business, well, it might work initially, but the reality is, it will just create more federal debt (think Bush tax cuts of 2003). Also, the current tax codes (loop holes) are too favorable for corps. With the proposed lower corp. base tax rate it will just make it easier for corporations to not pay ANYTHING. Wonderful, if it wasn't hard enough to fund schools and roads, now we'll make it even harder. How about simply closing OFF the tax loopholes, give corporations "kickers" to earn tax credits on hiring in the US and other things that could help. Giving them 15% right off the top -- that's so Trump, it's insulting.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#20Earlier quoted context omitted.
You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US. Microsoft, Apple, Goog etc have billions of dollars parked outside the country.
Is there evidence of this? Tax reduction proponents often claim some offsetting benefit, but rarely does it seem to come true. Look up the Laffer Curve from the 1980s, when the Reagan administration claimed that tax cuts would spur economic activity and actually increase tax revenue. Also, to a degree it's based on the premise that these companies are overwhelmed with high taxes and that is determining their behavior…
The evidence is that US corporations are stashing ~$2 trillion dollars offshore. I'm not saying cutting taxes will fix the problem, but it is very apparent that the current tax rate is determining their behavior. Unfortunately it can become a race to the bottom for countries trying to capture the taxes on that income.