We’ve heard a lot about President Trump’s upcoming tax reform plans, including slashing business taxes. And while broad reform may be difficult, if not impossible, there are some attainable wins. For instance, high corporate taxes hurt everyone and should be cut. The costs are obvious for organizations, but there’s also a bottom line cost to workers in the form of less overall pay.
Two ideas worth pursuing in that regard include lowering the corporate tax rate from 35 percent to 15 percent, and allowing a one-time 10 percent repatriation rate.
These strategies would spur the economy almost immediately – much better than growth through disaster rebuilds. Some may oppose these ideas because they’ll be seen as benefiting the rich. But those folks don’t understand that higher corporate rates mean less money for workers, higher prices for customers, and smaller gains for shareholders.
Taxes are passed down, and that won’t change any time soon. And while consumers and investors can find alternatives, workers have a harder time dodging these taxes, so they effectively are the hardest hit.
It all leads to crazy situations. I mean like when Apple borrows money in the U.S. to pay investor dividends while also holding several hundred billion dollars overseas. That means it’s cheaper to pay interest on borrowed money than to bring overseas profits home. So, maybe we do need full reform. But with that being unlikely, there are at least a few things we can do tax-wise to spur the economy and end Apple-like practices.