Trump gets his tax cuts for US big business
AMERICAN businesses are celebrating their biggest tax cuts for decades after politicians agreed a huge overhaul to boost the economy.
The US is slashing its corporation tax rate from the highest in the West to one of the lowest.
Fears have previously been expressed that Donald Trump’s new tax regime will impact on Ireland, potentially enticing major US multinationals to take their business back to a now low-tax USA.
America’s corporation tax will be slashed in January from 35% to 21%. Ireland’s rate is significantly lower, at 12.5%, but other incentives are in train to attract big business back to America.
Companies which have stashed their cash abroad to keep it out of the authorities’ clutches are being given a one-off opportunity to bring it home for an even lower bill.
It marks the first big victory for President Trump, who has struggled to enact many of his election pledges after almost a year in charge. He said: ‘It will be an incredible Christmas gift for hardworking Americans.
‘I said I wanted to have it done before Christmas. We got it done.’
He also tweeted: ‘The tax cuts are so large and so meaningful. This is truly a case where the results will speak for themselves, starting very soon. Jobs, Jobs, Jobs!’
The bill was passed by senators yesterday with support from 51 Republicans, but against bitter opposition from the 48 Democrat senators, who all voted against it.
The Democrats believe it will only help the super-rich and leave the poor worse off. Minority leader Chuck Schumer said: ‘A year from now, Republicans will be running from this bill in shame for voting yes.’ Protesters in the Senate chanted, ‘Kill the bill, don’t kill us’, before being ejected.
Mr Trump will sign the bill into law this month. It will cut taxes by an estimated $1.5trillion in the next ten years – but will also increase the US national debt.
The current 35% corporation tax rate is seen as punishingly high by many US firms – a problem made even worse because profits earned abroad are taxed when they are brought back into the country.
But the tax on future foreign profits will be abandoned, and a one-off lower rate of up to 15.5% will be charged for companies that bring existing profits back into the US.
The aim is to encourage businesses such as Apple and Alphabet, which owns Google, to bring their profits home and hand them out to shareholders or invest them in America.
Republican Paul Ryan, speaker for the House of Representatives, hailed the move as ‘a generational defining moment’, adding: ‘This is without question the single most important thing we can do to once again make America the best place to do business.’
As well as boosting corporate America, the reforms also cut income tax at all pay levels. However, there are concerns that public services will be hit to fund the cuts.
‘Kill the bill, don’t kill us’