I agree, but small business that use passthrough will be exempt on their first $75k in income. It helps.
The big key is bringing back major industry. That is already happening due to the elimination of so many Obama era regulations. Add in immediate expensing for five years and a low rate on profits made overseas and that should should bring hundreds of billions back into the U.S. economy. There is a minimum of $2.5 Trillion dollars in oversea profits American corporations are hoarding overseas simply to avoid paying 40% taxes on them.
Burger king moved its’ corporate filings/headquarters from Florida to Canada to avoid corporate income tax. Canada has a corporate income tax of 15%.
EATON moved their filings to Ireland for the same reason. Now we have every corporate decision of a multi-billion dollar conglomerate made in Cleveland, OH, but not one dime of income earned from overseas comes into this country from this company. Taxes are paid overseas and profits are held in foreign bank accounts.
Thousands of American companies have done this over the past decade. Stopping & reversing Corporate Inversion is essential in keeping the U.S. as the leading economy in the World.
There is also the currency exchange issue and Trump knows about it and it includes China's currency manipulation and the U.S. dollar being used as the world's reserve currency. Trump knows about it this and I'm sure he's working on it and
I've heard him mention these issues especially China's massive currency manipulation to give China an advantage in Manufacturing and as we see most things are made in China.
The biggest example of a corporation moving its operations overseas is Apple. I am not talking about their manufacturing operations in China, which was motivated more by labor costs than anything else. I am talking about what they have done with their intellectual property. Apple formed an Irish subsidiary many years ago to take advantage of Ireland’s very low corporate tax rates. I believe their top rate is 14%. Apple then contributed virtually all of its intellectual property to this entity, so that every time someone buys an iPhone, iPad or computer from Apple, a significant part of the price is going to that Irish subsidiary, which has extraordinarily low costs. Ironically, that Irish subsidiary has most of its money sitting in US-based banks, but the US government cannot touch either the money it earned in the first place, or the interest that it earns in those banks, because it is all Ireland-based. Apple has now got approximately 250 billion dollars of earnings overseas that have never been taxed in this country, and never will be unless we give them a big break on repatriating those funds.
Frankly, even with a rate differential of 7%, Apple has no reason to disband it’s Irish subsidiary or to alter its operations in any way. The only thing that will make them do that is pressure from the public and its shareholders.
Is that true? I'm a sole proprietor pass-through. My understanding is that there will be a 20% deduction off the top, and the rest would be taxed at my personal rate.