Trump wants to lower the corporate tax rates to 15% in order to compete with China. One of the reason US companies are leaving the United States and creating more jobs overseas is because of the present high corporate tax rates in the US and lower corporate tax rates in other countries.
Companies like Apple, Google etc are stashing their money, estimates say in trillions of dollars in Ireland who has the lower corporate tax rate.
If the United States lowers their corporate tax rates to the same levels as our their competitors then the trillions of dollars stashed outside will come in and America will begin to boom.
Tonight Trump’s team meets with Paul Ryan to hash out a tax plan:
Big group meeting with Ryan at the Capitol: Kushner, Bannon, Priebus, Cohn, Stephen Miller… Ryan will walk through "A Better Way" tax plan
— Robert Costa (@costareports) January 9, 2017
Both Trump and House Republicans want to lower the corporate income tax rate and pay for it by scaling back tax breaks. The top rate is 35 percent, but most corporations pay much less thanks to exemptions, deductions and credits.
Trump wants to lower the corporate tax rate to 15 percent. Ryan says 20 percent is more realistic to avoid increasing the budget deficit.
House Republicans also want to scrap the United States’ worldwide tax system and replace it with a tax that is based on where a firm’s products are consumed, rather than where they are produced.
Under current law, the United States taxes the profits of U.S.-based companies, even if the money is made overseas. However, taxes on foreign income are deferred until a company either reinvests the profits in the U.S. or distributes them to shareholders.
Critics say the system encourages U.S.-based corporations to invest profits overseas or to shift operations and jobs abroad to avoid U.S. taxes.
Under the new system, American companies that produce and sell their products in the U.S. would pay the new 20 percent corporate tax rate on profits from these sales. However, if a company exports a product, the profits from that sale in another country would not be taxed by the U.S.
Foreign companies that import goods to the U.S. would have to pay the tax.
Exporters have shown support for the idea. But importers, including big retailers and consumer-electronics firms, say it could lead to steep price increases on consumer goods.