Will New Corporate Tax Plans Hurt the U.S. in the End?

shutterstock_67757422

 

The winds of change are blowing when it comes to taxes and corporate taxes are no exception. President Trump and the House are both ready to lower the corporate tax rate in an effort to create a more business friendly environment for U.S. companies here in the states. Currently, the corporate tax system is a mess, which is why so many large companies keep so much of their earnings overseas, and that costs the U.S. billions in tax revenue.

The basic premise behind the current administration’s plan is to change the current model of tax on the return to capital into a model that taxes only extraordinary profits. The plan would do this by taxing corporate cash flows. The plan would make three major changes to accomplish this.

Number one, any investment outlays would not have to be depreciated over time, but instead they could be written off during the same year they were undertaken. The next major change would make interest payments to creditors non-tax-deductible. Lastly, in order to continue to promote our county’s competitiveness with the rest of the world, corporations would not have to include export receipts when they calculate their taxable income. On the other hand, they would not be allowed to deduct from their income payments to foreign affiliates and suppliers.

However, there are some who feel this plan could be very detrimental to our nation’s economy in the long run. The first problem is that the change could increase income inequality even more between the wealthy the rest of the country. The tax change could also increase uncertainty, put additional burdens on certain sectors and cause a volatile redistribution of income. The tax change could also hurt the global economy, according to some circles and the long-term of cost of making this tax change could end up causing large tax increases or spending reductions.

Of course, there are two sides to every story, so it remains to be seen what changes are made and how they will affect corporations and our nation’s financial well-being.

https://www.nytimes.com/2017/01/07/upshot/the-major-potential-impact-of-a-corporate-tax-overhaul.html?_r=0

https://www.washingtonpost.com/opinions/trump-and-ryan-are-right-to-tackle-corporate-taxes-but-their-approach-would-do-harm/2017/01/08/e7abd204-d429-11e6-9cb0-54ab630851e8_story.html?utm_term=.fd3e2b28a833

Posted in

Chester Wooley on Where Philanthropy and Venture Capital Meet

Geoff “Chester” Wooley, Co-founder Patamar Capital and current board member of SKS Microfinance, India’s largest microfinance bank, discusses where philanthropy and venture capital meet on Alan Olsen‘s American Dreams Show. Transcript:   Geoff Woolley  0:00   Philanthropy and a family office’s investing is quite separate from each other. Depending on the size of the family office, its foundation or…

The Future of ESG and Impact Investing with Michael Meehan

The Future of ESG and Impact Investing with Michael Meehan

Michael Meehan, Co-founder, Canoe Carbon, Forum for Impact, and former CEO, GRI discusses the future of ESG and impact investing on Alan Olsen‘s American Dreams Show. Transcript:   Alan Olsen  Michael, you have a remarkable story. And for the listeners here, can you share your background and how it got you to where you are today?   Michael…

Becky Douglas on Saving Leper Colony Children

Becky Douglas on Transforming Leprosy Colonies in India

Becky Douglas, founder of Rising Star Outreach, a non-profit dedicated to saving and transforming the lives of children and their parents affected by leprosy in India, discusses how it became reality on Alan Olsen’s American Dreams Show. Rising Star Outreach born from tragedy. Becky’s journey to helping leper colonies in India began with a personal tragedy that transformed…

Unveiling Entrepreneurial Success with Randi Brill

Unveiling Entrepreneurial Success with Randi Brill

Randi Brill, best-selling author and CCO of Just Call Randi Design Agency discusses unveiling entrepreneurial success on Alan Olsen‘s American Dreams Show. Transcript: Alan Olsen Hi, this is Alan Olsen and welcome to American Dreams. My guest today is Randy brill. Ready welcome to today’s show.   Randi Brill Thank you, Alan. I’m glad to be here.  …