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The idea I think was to lower the corporate tax in general which will also give companies an incentive to stay and pay taxes here. Don't know how that will work
by rdtsc 9y ago
The idea I think was to lower the corporate tax in general which will also give companies an incentive to stay and pay taxes here. Don't know how that will work long term. Maybe it will, until there would be another tax haven country advertising a better tax deal.
- adventured 9y agoFortunately it's more elaborate than that. Ideally the US begins stealing corporations and manufacturing from the rest of the world, whereas previously the flow had been going the other direction, with dozens of large companies abandoning the US for lower tax locations. For example, the lower corporate tax rate, combined with very inexpensive US energy (cheap natural gas), makes manufacturing in the US even more appealing. You don't have to beat all the other tax havens, you just have to get low enough to be competitive on the overall value proposition. The UK is at or going down to 17.5%, that 3.5% variance with the new US rate becomes mostly meaningless as an issue (17.5% vs 35% however is a drastic gap).