How might corporate income tax be changed?
This is what is circulating in the House, Trump and the Senate have yet to influence it directly:
KEY DIFFERENCES BETWEEN CURRENT U.S. CORPORATE TAXES AND HOUSE GOP PROPOSAL
Corporate Tax Rate:
Current: 35%
Proposal: 20%Capital Expenses:
Current: Depreciated over time
Proposal: Deducted immediatelyInterest Expenses:
Current: Deductible.
Proposal: Net interest expense not deductibleBasis for Location of Taxation:
Current: Profits
Proposal: SalesTaxation of Foreign Profits:
Current: Pay foreign tax, pay U.S. tax upon repatriation, minus foreign tax credits
Proposal: Generally repatriated without U.S. taxes, after one-time transition taxBorder Adjustments:
Current: None
Proposal: Tax applied to imports, removed from exports
There is more at the WSJ link, a very clear and useful piece by Richard Rubin. Do note that a stronger dollar — which we already see — will undo some of this effort to put American exports on a stronger footing. And deducting capital expenses immediately seems like an attempt to goose up the current economy in an unwise and unsustainable fashion. The lower corporate tax rate is a good idea. What are your opinions on these changes?