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.
WHITE HOUSE UP AT THE PLATE: On Wednesday, Treasury Secretary Steve Mnuchin and National Economic Council chief Gary Cohn stepped to the plate in the White House Briefing Room to announce the principles of President Trump’s Tax Reform proposal. Washington Post reporter Damian Paletta characterized the plan this way, while the Wall Street Journal Editorial Page proclaimed, “President Trump’s tax reform proposal is an ambitious and necessary economic course correction — one that would help restore broad-based American prosperity.” Giong on to say that, “his plan to set the U.S. corporate tax rate to 15 percent would lead to a surge in capital investment.”
The RATE Coalition offered its support to the President’s plan too:
“We applaud President Trump’s proposal to remake our tax codeto encourage economic growth and job creation and bring a major improvement over the status quo, which incentivizes companies to move overseas to escape the crushing U.S. corporate tax rate, which is the highest in the world.
“RATE Coalition member companies pay these high taxes – an average effective tax rate of 32 percent. We have thus seen what the anti-competitive U.S. tax rate has done to our own economic activity. It has handicapped us against our international competitors; it has made it more difficult to invest in our American operations; it has limited the value we can create for our shareholders; and it has made it harder to invest in our employees.
“We believe that the President’s proposal could spark an economic boom, enabling us to create better jobs, a higher standard of living, and make American companies — including RATE member companies — much more competitive in the global marketplace. We also believe that, in the long run, the President’s proposal would stop the steady erosion of America’s corporate tax base. In other words, corporations would stop fleeing America in pursuit of a more favorable tax rate, and will instead either stay here or come back home.
“We understand that the President’s proposal is one step in what will be a long and challenging task – after all, it is very clear that tax reform is not easy. We look forward to being ready partners with both the Executive and Legislative Branches, as it is imperative that we fix America’s tax code now. We will do all that we can to help move this process forward on behalf of all the hard-working Americans who are employed by RATE Coalition companies, igniting economic growth and jumpstarting job creation for the next generation of business leaders and entrepreneurs.”
OUTSIDE THE BELTWAY REACTION:
According to Brent Snavely of the Detroit Free Press, automakers welcomed President Donald Trump’s proposal to drastically cut corporate taxes on Wednesday but expressed deep concerns about reports that the administration is preparing to officially withdraw from the North American Free Trade Agreement. Specifically, Ford and GM give the Trump plan a thumbs up.
President Trump’s favorite New York paper also voiced their approval of the tax cut plan. The New York Post editorial board wrote, “President Trump moved Wednesday to fulfill one of his key campaign promises, outlining a dramatic plan to slash taxes for nearly all individuals and businesses and give the tax code its biggest overhaul in three decades.”
And Charleston, South Carolina’s Post and Courier newspaper hailed that the President’s “proposed reform of the federal tax code would give breaks to individuals and corporations that are almost sure to boost economic growth, and the prospect is long overdue.”
WHAT IT MEANS FOR THE STOCK MARKET:
The folks at Market Watch offer this insight into the potential impact of the Trump Tax Plan on the markets. Bottom line, they say: “The market has basically priced in tax reform” already.
RATE TWITTER CHALLENGE: Summer is almost here in Washington! Who needs some new koozies? The first three folks to tweet a selfie in front of our ad in Terminals B and C 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.