Trump Looks to Cut U.S. Corporate Tax Rate to 15 Percent

[SirLinksALot]

SOURCE: TOWNHALL

URL: https://townhall.com/tipsheet/leahbarkoukis/2017/04/25/trump-looks-to-cut-corporate-tax-rate-to-15-percent-n2317850

by Leah Barkoukis


President Trump has his eye on a corporate tax rate of 15 percent, even if that means adding to the national deficit, the Wall Street Journal reported Monday.

Trump reportedly told his aides to draft a proposal that could be presented to the American people today.

But such a plan would be an extremely tough sell to Republican lawmakers who’ve spent the last decade making debts and deficits a central issue, Politico’s Playbook notes. Plus, it could put future, permanent, tax cuts at risk.

Mr. Trump’s willingness to let deficits run higher also could hinder the passage of tax cuts that are permanent. Congressional Republicans plan on using a procedural tool known as reconciliation that would allow the tax legislation to pass with a 51-vote majority in the Senate, instead of the usual 60 votes. Under those rules, changes can’t add to deficits beyond a decade.

“It’s the same discussion they had about the Bush tax cuts in the previous administration: Are you better off having a smaller cut that is permanent, or a larger cut that is temporary?” said Mick Mulvaney, the president’s budget director, in an interview last week.

On top of the deficit issue, there are several other roadblocks that get in the way of Trump’s proposed corporate tax cut, such as passthroughs, reconciliation, tradeoffs, and corporate splits.

Trump is expected to lay out the principles for his tax reform on April 26.

[SirLinksALot]

RE: Concerns about higher deficits.

The above concern shows typical STATIC thinking. Few people ever consider the DYNAMIC result of corporate tax cuts and what it will do to encourage the formation and expansion of new businesses, and of course -- creation of employment and thus, tax payers.

A substantially lower corporate tax rate would probably result in less corporate tax revenue collected by the federal government, but it would also create a lot of jobs and increase tax revenue from personal income taxes and payroll taxes.

Higher employment also cuts government spending on welfare, food stamps, medicaid, and other social programs that benefit unemployed workers.

So ,  a major corporate tax cut would not increase total government deficits at the federal and state levels, and would create jobs for millions of Americans and greatly improve the lives of millions of our people, without increasing government budget deficits.

HISTORY gives us the evidence. Just look at the results of the JFK tax cuts in the 1960's and the Reagan tax cuts in the 1980's:

Federal revenue in 1960 = $92.5 B
Federal revenue in 1968 = $153.0 B
Over a 50% increase in revenue!

Federal revenue in 1980 = $517.5 B
Federal revenue in 1989 = $909.0 B
Over a 70% increase in revenue!

The problem is NOT the tax cut, the problem ( as history tells us ), is what government does with the INCREASED REVENUE that will come in tot he treasury. If you are thinking of "MORE GOVERNMENT SPENDING", go to the head of the class.

[geronl]

Trump has definite plans to spend a lot more too. You just know they will try to offset tax cuts in one area with tax hikes elsewhere

[mirraflake]

I have a corporation and generally pay no corporate tax because I spend down the money  in the business checking account at the end of the corporate year-pay utilities ahead for 6 months, make a major purchase, take it out as income. etc. There is all kinds of tricks.

This year I saved some money up in the bank because my company was going to lose a major client (20% of my business) due to them being bought out and I had to make some major purchases this year.

I got hit with the tax this year hard and it hurt. I was penalized for trying to save up some money to help my business survive.

I hope Trump gets this done.

[SirLinksALot]

I got hit with the tax this year hard and it hurt. I was penalized for trying to save up some money to help my business survive.

I hope Trump gets this done.

I feel for you. The problem will be -- CONGRESS.

The Dems will (as usual) start posturing about the deficit, revenue and how it will ( as usual ) cause essential government programs to go unfunded .. etc. etc.

[catfish1957]

I like it, but wish he would go full Rambo on gutting the federal bureaucracy

[ExFreeper]

Corporate Rate Cuts a Poor Way to Grow the Economy

The erroneous international comparisons of corporate tax rates are often coupled with arguments that cutting the U.S. corporate tax rate would help create jobs and growth.  In fact:

    The case for slashing corporate tax rates is thin: U.S. companies are posting near-record profits, and little suggests that corporate taxes — or poor corporate profitability — are a major constraint for the U.S. economy.

    Most of the benefit of corporate rate cuts flows to high-income investors rather than “trickling down” to workers in the form of higher wages, and the cuts are costly:  Reducing the corporate tax rate to 15 percent, as President Trump has proposed, would cost more than $2 trillion over ten years.  Such a tax cut could hurt the majority of Americans if it permanently increased deficits (which can slow economic growth in the long run, according to the Congressional Budget Office) or its high cost is paid for with large cuts to investments that help working families.

    Rather than slashing the corporate tax rate, true corporate tax reform that addressed inefficient corporate tax breaks, loopholes, and the tilt of the tax code towards debt and foreign profits would be more likely to foster growth.  Such reform could help ensure that investments flow to where they are most productive.  It could also raise revenues to reduce deficits and invest in national priorities like education and infrastructure that deliver long-term benefits for the economy and the majority of Americans.

http://www.cbpp.org/research/federal-tax/actual-us-corporate-tax-rates-are-in-line-with-comparable-countries

THE CASE FOR RESPONSIBLE BUSINESS TAX REFORM
A Report by the U.S Department of the Treasury’s Office of Tax Policy

https://www.treasury.gov/resource-center/tax-policy/Documents/Report-Responsible-Business-Tax-Reform-2017.pdf

International Corporate Tax Rate Comparisons and Policy Implications
Congressional Research Service

https://fas.org/sgp/crs/misc/R41743.pdf

[Hondo69]

Pavlov should be smiling.  When the public hears "corporate tax rate" they think of huge international companies such as GE and Ingersoll Rand.  They don't make the connection when they walk into Bob and JoAnn's diner.

Why do Bob and JoAnn have to pay an extra "fee" for depositing more than $ 3000 of cash per month at the bank?  Answer: Dodd/Frank.

Why are small business loans still tough to get after the Housing Crisis is far in our review mirror?  Answer: Congress has their head up their a**.

Why is the FDA trying to shut down my e-cigarette stores?  Answer: Big Tobacco.

Should I go on?  I'm loaded for bear.