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Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

bloomberg.com

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Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#41

Post by ncallaway »

humanrebar wrote: post #26
gjmacd wrote: post #19

No 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…

> No corporation with a good tax team pays anything more than 20% of taxes Seems like a good reason to level the playing field, no? We want businesses to succeed by providing better products and services at better prices, not by being extra good at bureaucratic arbitrage.

Okay, but _just_ lowering the top-line number doesn't do anything about that. It just lowers the top-line number.

If he was proposing making the top-line number 15% and removing all deductions and credits, then you'd have a more compelling point.

Myself, I'm going to wait until a full tax plan comes out before passing judgement one way or another. One number devoid of context tells us nothing.

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#42

Post by adamwathan »

geff82 wrote: post #16

We 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.

The corporate tax rate here in Canada is 15% for profit up to $500,000, and 25% after that.

We also have a lot of rules in place to prevent income from being double taxed, for example if my business pays taxes on $400,000 in profit and I take $150,000 in dividends, I get credit for the 15% in taxes that the business already paid and am only responsible for the other ~15% that I would have owed if I had made all of that $150,000 in regular personal income.

I was surprised to find that the US corporate tax system is so brutal compared to what we have here. Higher rates, double taxation, enforcing that you pay yourself a salary and not just dividends, etc.

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#43

Post by tmaly »

gjmacd wrote: post #19

No 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…

If you look at large corporations like GE they already pay almost zero percent tax using all sorts of tricks.

I think normalizing the tax rate to what the rest of the developed world has and making it simpler would bring the biggest benefit to smaller businesses such as mom and pop shops.

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#45

Post by plandis »

This seems bad to me. Without a border-adjustment tax (or some easy, intuitive way to figure out what to tax) this just lowers the bar with the same number of loopholes as before.

Companies will still use tax loopholes but now the government will lose even more money.

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#46

Post by LinuxBender »

humanrebar wrote: post #31
LinuxBender wrote: post #21

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.

Simplified to 15% across the board for businesses and individuals alike?

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#47

Post by markvdb »

cortesoft wrote: post #33

I 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.

You're describing more or less the Estonian system here. 22% flat tax rate, no taxation until the money actually leaves the company.

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#48

Post by crusso »

alkonaut wrote: post #39

To 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…

The US Federal government's role isn't to manage all commerce within the states. It's not a matter of what "federal law allows". Managing tax rates within states is not a Federal power enumerated in the Constitution.

It's a good thing that States are forced to compete with each other on offering suitable economic environments for the businesses that they wish to attract. Big corporations can offer significant tax revenues and employment opportunities for the states they call home. There's no reason why States shouldn't use whatever means are at their disposal to attract good companies for their citizens.

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#49

Post by Avshalom »

cortesoft wrote: post #33

I 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.

That is what's taxed, profits, as long as they keep using it to drive the economy it doesn't get taxed.

Re: Trump Tax Plan Said to Call for Lowering Corporate Rate to 15%

#50

Post by jogjayr »

cortesoft wrote: post #33

I 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.

I don't actually have an opinion either way because I don't understand the tax system well enough. But I'm curious, why do you think:

a) money pulled out of business for personal consumption isn't driving the economy? - that's how other businesses make money

b) personal consumption isn't already taxed? That's what sales tax does right?

c) money pulled out of businesses isn't used to finance other businesses? eg. I live off dividends from my index funds while I bootstrap my startup.

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