Brooke Simpson-Trump Tax Cut Could Reduce Overseas Profit Hoarding

Trump Tax Cut Could Reduce Overseas Profit Hoarding by this Much

The Tax Cuts and Jobs Act that was signed in December will reduce profits by US companies stashed in other countries by an estimated $65 billion, according to the Congressional Budget Office.  The corporate tax rate has been lowered from 35% to 21%.  Now the CBO says that there is less incentive for a company to move property to a lower-tax country, which they have previously been doing, and leaving less money in the higher tax country.  The CBO is also saying that the US will be a less appealing place to stash debt, giving the US net international investment a positive push.  Another part of the act changed the US global tax system to be territorial, so that companies are only taxed once in the country where the profits are earned.  Bringing money into America was a big part of the 2016 election, and now more than 400 companies have increased domestic investments because of the act.

The article was written by Brittany De Lea on April 30, 2018 for FOXBusiness.  The article is important because taxes are a very sensitive topic for almost every American, and people have really different opinions on how to deal with taxes and how much should a person or business be taxed.  The act seems like a win for Republicans because Republicans typically want as much money in the economy as there can be.  The article can be compared to George H.W. Bush’s promise to have no new taxes, Donald Trump promised to lower taxes, and Republicans are hoping the president will follow through completely with that promise, because HW Bush was almost forced to raise taxes.