US president Donald Trump has laid out a plan to overhaul the country’s tax code. It includes slashing corporate and individual taxes, and removing deductions.
CGTN’s Daniel Ryntjes explains.
The Republicans have unveiled their tax reform framework, which includes slashing the corporate tax rate from one of the highest in the world, 35 percent, down just 20 percent.
“We have surrendered our competitive edge to other countries but we are not surrendering anymore. We’re not surrendering anymore. Under our framework, we will dramatically cut the business tax rate so that American companies and American workers can beat our foreign competitors and start winning again,” President Trump said.
U.S. multinationals like Apple have been stashing their profits abroad for years to avoid these high corporate taxes. This plan envisages a repatriation deal which could bring home an estimated $2.5 trillion.
The overall plan is to simplify a highly complex and cumbersome tax system, reducing loopholes, levying a simple 25 percent rate on small business and reducing the load for middle class and poorer working families.
But Democrats aren’t buying it.
“They hope they can talk one way and fool the American people. We’re not going to let them. And this plan is our best ammunition that what they say and what they are doing are different,” Charles Schumer (D-NY), Senate minority leader said.
An initial calculation by the Committee for a Responsible Federal Budget said this plan could cost $2.2 trillion over ten years, which would need to be matched by some combination of increased debt and decreased spending.
One of America’s founding fathers, Benjamin Franklin famously said “there’s nothing can be said to be certain, except death and taxes.”
And today add another certainty: to undertake a major tax reform will require enormous political skill in navigating through a mountain of complex and politically fraught choices.
Gordon Gray discusses President Trump’s tax plan details
For more on US tax reform CGTN’s Rachelle Akuffo spoke to Gordon Gray, Director of Fiscal Policy at American Action Forum.