Will Pres. Trump also consider removing AMT?
I have mixed feelings about this, I guess. I don't like the AMT, but if it never gets adjusted, it turns into a simplified tax code at some point.
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%
#32No 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 corpora…
maybe big corporations can afford to reduce their taxes, but small companies can't.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#33I am pretty liberal, but I DO think corporate taxes should be lower. We should tax the money that people pull OUT of a business for personal consumption, not the money that is being used to drive the economy.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#34A 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.
> You are missing that the reduction should cause some money sitting in coffers outside to flow back in to US.
No, it won't. The only reason to repatriate it would be to spend it, which (since corporate "income" tax is a tax on retained profits, not income) would result in a 0% tax with or without the tax cut.
No matter how low (so long as it is non-negative) the US corporate tax rate goes, it makes no sense to reptriate the funds and pay taxes on them otherwise.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#35We 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.
To be fair, there are more people worried about how they can afford healthcare and home ownership than worried about increasing the number of millionaires and wealthy corporations in America--we already lead the world there, while we trail behind in the former problems.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#36A 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.
The money is sitting outside the US because the companies do not need it in the US, or at all. They have literally no idea how to invest money faster than they can think of investment that would yield more profit than a tracker fund.
The only reason to move the money back to the US would be to hedge against a sudden rise of interest rate that would make funding hypothetical future US venture slightly more expensive. Obviously the rate at which such a hedging make sense is probably very low, single digit low.
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#37Earlier 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…
There's very little evidence that tax cuts stimulate economic growth. If there was meaningful evidence the investigators would receive the Nobel Prize -- every year. And while economists can be relied upon to provide all sorts of elaborate theoretical "evidence" the actual empirical evidence tends to confirm the opposite: significant tax cuts have zero to negative impacts on growth [1].
It will be interesting though to see what tax cuts do in such a low-growth environment. In the end it seems Wall St. will be the big winner. There's plenty of actual evidence that tax cuts (a) eventually make it back to investors once finance takes its cut and (b) tax cuts lead to most firms adopting a much higher risk profile [2]. Ironically we could see lots of mergers and overseas expansion.
[1] http://graphics8.nytimes.com/news/business/0915taxesandecono...
[2] https://www.bloomberg.com/news/articles/2017-04-19/u-s-tax-c...
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#38Republicans 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.
Don't forget illegal wars, increased military funding, and raising taxes anyway ( https://en.wikipedia.org/wiki/Read_my_lips:_no_new_taxes ).
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#39To me it's strange how federal law allows local governments to offer tax breaks to individual companies in order to attract them. Conversely, large corporations can play states against each other for the sweetest deal. As a comparison this isn't allowed e.g in the EU and not between regions within most countries.
Shouldn't a tax reform close that possibility, which should raise a lot of tax revenue, which could then be used to cut corporate taxes, but now in a fair way?
Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%
#40Honestly, corporate taxes don't make much sense. It would be much better if we reduced the corporate tax rate to 0% and made up the difference by increasing capital gains tax.