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.
Healthcare Vote Impact: There’s no two ways about it: the fate of tax reform may depend on the American Healthcare Act vote in the House. CNBC has a very telling story about the impact all this uncertainty is having on Wall Street. The thinking goes like this: if the House passes a repeal bill, and the Senate subsequently passes a bill, that’s a clear positive for the markets because it greatly increases the chances for a tax-reform bill. Down the road, if the House passes a bill but it fails in the Senate or in any compromise bill with the House, tax reform is still alive but will be more difficult. Finally, if the House vote fails, that’s a clear negative for the markets and would lower the chances for tax reform. Of course, the House could bring up a new version in the weeks ahead and keep attempting to pass it, but the leadership is certainly not signaling that is an option and that would again cause considerable delay and push off tax reform even further.
Fund Infrastructure through corporate tax reform?
The idea of using a temporary corporate tax holiday to bring back billions of dollars stranded overseas is nothing new. It’s been done before, and there are plenty of white papers out there demonstrating why it’s a bad long-term idea. But in the context of real comprehensive tax reform the likes of which hasn’t been seen in the United States for 30 years, the idea is getting renewed interest. Specifically, Rep. John Delaney (D-Md.), has introduced two pieces of bipartisan legislation co-sponsored by Republican lawmakers to rebuild infrastructure by encouraging U.S.-based multinational companies to repatriate the profits they hold abroad at reduced tax rates, according to Michael Cohn’s piece in Accounting Today. One of the bills, co-sponsored by Rep. Rodney Davis (R-Ill.), the Partnership to Build America Act, would create an American Infrastructure Fund to finance state and local infrastructure projects, capitalized through a one-time $50 billion bond sale to U.S. corporations looking to repatriate part of their international earnings. The fund could be leveraged at a 15:1 ratio to provide up to $750 billion in loans or guarantees to state and local governments for infrastructure projects.
RATE TWITTER CHALLENGE: By now, all you loyal Rate Watch readers are well aware of our ad campaign, “Real Tax Reform Starts With The Rate.” You’ve seen the video, and now we want to know if you’ve seen our ads up in Terminals B and C at DCA. So, the first three folks to tweet a selfie in front of our ad at National Airport to @RateCoalition will receive a five-pack of RATE drink koozies!
WE WANT TO KNOW: Can the 115th Congress and President Trump successfully tackle Tax Reform in 2017? Log on to our Facebook page and let us know what you think!
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.