The corporate tax rate for American companies still stands at 39% if you include taxes at the state level — we still have the dubious distinction of leading the world when it comes to the highest business tax rates.
POTUS ON TAX REFORM: Among other important topics at his press conference this afternoon, President Donald Trump briefly addressed the timeline for tax reform, saying, “Tax reform is going to happen fairly quickly. We’re doing Obamacare. We’re in final stages. We should be submitting the initial plan in March, early March, I would say. And we have to, as you know, statutorily and for reasons of budget, we have to go first. It’s not like, frankly, the tax would be easier, in my opinion, but for statutory reasons and for budgetary reasons, we have to submit the healthcare sooner. So we’ll be submitting healthcare sometime in early March, mid- March. And after that, we’re going to come up, and we’re doing very well on tax reform.”
SWISS REJECT TAX REFORM: The Swiss electorate rejected, by 59 to 41 percent, the government’s proposed tax reform compromise in a plebiscite last Sunday. The move upends attempted negotiations to lower Switzerland’s effective corporate income tax rate, creating “uncertainty . . . for the multinationals present in Switzerland,” according to Charles Lassauce, member of the board of directors of the Geneva Chamber of Commerce. Swiss Finance Minister Ueli Maurer further warns that “there’s the danger that Switzerland disappears somewhat from the radar of international companies.” Meanwhile, the European Union is perturbed by the outcome, with Tax Commissioner Pierre Moscovici expressing his serious disappointment on Monday, and affirming the need to “consult the member states so we can decide together how to proceed.”
AUSTRALIAN RATES: Wesfarmers CEO Richard Goyder warns that a global economic “war” is emerging around business environments and tax rates—and that Australia risks defeat if it cannot rein in its own excessive business taxation. Comparing Australia’s corporate income tax rate unfavorably with that of Britain, and the 20 percent rate proposed by the American President and House Republicans, Goyder criticized “this notion [that] we can keep taxing business at 30 percent . . . and there is no consequence. There is a consequence to that.”
ANALYST: IMMINENT TAX REFORM UNLIKLEY: Liz Ann Sonders, chief investment strategist at Charles Schwab, tells CNBC that tempering expectations for immediate tax reform is important. It is unlikely, she explains, that such a complex policy program will move through Congress in the first half of the year. However, she notes that “the implications for earnings are potentially significant . . . earnings will be up about 12 percent for 2017 [already, given present performance, and] . . . tax cuts . . . could mean another 7 percent to 15 percent earnings growth.”
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AND, REMEMBER THE RATE PLAN: The U.S. corporate tax rate is already the highest in the world, which is why we believe our plan to fix the tax code, to set the corporate tax rate at a globally competitive 25% or less, to close tax loopholes, to keep American companies in America, and to enable the U.S. economy to grow resulting in a higher standard of living for American workers is the best path forward.
CONTACT US: For questions or for additional resources, please contact Michael DiRoma of The RATE Coalition and QGA Public Affairs at email@example.com.