Do American businesses deserve a tax cut? | The Tylt
During his campaign, President Trump promised he would cut the corporate tax rate from 35 percent to 15 percent. Conservative critics say that might balloon the deficit, but others argue economic growth would pay for it. Supporters of the cut say America’s corporate tax rate is one of the highest in the world, but critics say what companies actually pay is much lower after taking advantage of every deduction and loophole. Do our corporations need a tax cut?
Do American businesses deserve a tax cut?
Some economists and politicians argue that when the corporate tax rate is cut, companies will have more money to invest in new innovations and perhaps more hires. They say tax cuts could entice more businesses to settle in the U.S., and could bring back those that have that have moved offshore. Ireland did cut corporate tax rates, and attracted more corporate investment as a result.
And when it comes down to it, everyone hates taxes. Tax cuts are popular. No one likes the government taking away their money.
But others argue American corporations don't pay nearly what they owe. By the time they take advantage of every deduction and loophole available to them, the effective corporate tax rate is actually only 27 percent. Tax-avoidance schemes in places like the Cayman Islands are estimated to cost as much as $100 billion a year in lost revenue. Critics say our corporations don't need a tax cut—they need to pay up.
Bernie Sanders' massive grassroots movement was fueled by the idea that wealthy corporations need to start paying their fair share. 64 percent of voters believe that large corporations should pay more in taxes than they do now. A massive tax cut for corporations might be popular with CEOs, but could majorly backfire on the GOP.
Others say we must cut taxes on businesses if we want people to invest here.
Even hard-core conservatives like Orrin Hatch are wary of a massive tax cut that could balloon the deficit.
"I’m not sure he’s going to be able to get away with it."