The White House is proposing to cut corporate income taxes from 35 percent to 28 percent. President Obama also recommends that manufacturers get a further cut, to 25 percent, and he wants to impose a minimum rate on foreign earnings to discourage the use of tax shelters. There would other less substantive changes as well under his plan.The cut in the statutory tax rate, however, may not have as large an effect on the corporate sector as many anticipate. The reason is that this is intended as a revenue neutral change in taxes. To accomplish revenue neutrality, the cut in the tax rate will be accompanied be closing loopholes, i.e. a broadening of the base. Thus, every company receiving a tax break will be matched somewhere else by companies experiencing a tax increase. Thus, while some firms will benefit, others will get hit harder by these taxes and the net effect overall should be roughly a wash. Obama to propose corporate tax cutTug of war over inflation at the Federal ReserveAnother … [Read more...] about Corporate tax cut: Good idea, but won’t stimulate economy
Corporate tax cut
Last Updated Nov 9, 2017 4:51 PM EST U.S. stocks saw sizable losses Thursday, with technology and industrial companies and banks slumping after Republicans in Congress said they might delay their proposed corporate tax cut to 2019. Investors soon began selling some of the stocks that have done the best this year. "Markets are having a hard time digesting why cutting taxes is such an impossible task for Republicans," said Jamie Cox, managing partner for Harris Financial Group. "Markets are telling Republicans to get them done and stop wasting time."Keeping scoreThe Standard & Poor's 500 index fell 9 points, or 0.4 percent, to 2,584. The Dow Jones industrial average declined 101 points, or 0.4 percent, to 23,461. The Nasdaq composite index fell 39 points, or 0.6 percent, to 6,750. Each closed at an all-time high on Wednesday. The Russell 2000 index of smaller-company stocks fell 10 points, or 0.7 percent, to 1,471, its lowest level since late September.While investors sold some … [Read more...] about Stocks fall amid signs of delays in corporate tax cuts
Taxes may be inevitable, but how businesses and workers react to the tax code isn't always predictable. Take President Donald Trump's pledge this week to cut corporate taxes to 15 percent from their current 35 percent. In a speech in Missouri on Wednesday, Mr. Trump said a lower business tax rate would not only create jobs, but raise wages and help the average worker. "We must reduce the tax rate on American businesses so they keep jobs in America, create jobs in America and compete for workers right here in America," he said. "Because when businesses compete for labor, your wages will go up." While Mr. Trump's speech was billed as laying the groundwork for tax reform later this year, his proposal was short on details, which experts say makes it difficult to gauge how his plan might work. Yet on the face of it, a drastic cut to corporate taxes may not provide the type of benefit to the middle-class worker that Mr. Trump suggests. "It's the old trickle-down economics: If we … [Read more...] about Can Trump’s corporate tax cuts help the middle class?
Former Federal Reserve Chairman Alan Greenspan says that President Donald Trump’s landmark corporate tax cut is driving the stock market and a host of economic benefits, and that “we’re underestimating the impact of that.” Greenspan notes that when the tax rate is moved several percentage points, “a whole cascade of projects will fall on a ‘let’s-do-it’ type relationship, and I think that’s what’s happening at the moment.” “Remember that the stock market is being driven to a large extent by the one thing that I think the Trump administration did right: got the 35 percent marginal corporate tax rate and brought it down to 21 percent,” Greenspan said during a recent discussion at the American Enterprise Institute titled, “The Bubble Economy – Is This Time Different?” “I think that what is happening here in the United States is we’re underestimating the impact of that,” … [Read more...] about Greenspan: US ‘Underestimating Impact’ of Trump Corporate Tax Cut
Duke Energy Kentucky’s first rate hike in over 11 years could end up reduced - or killed entirely - because of the recently passed corporate tax cuts.That's at least what national cases, a previous Kentucky case, and a spokesman for the state utility regulator indicate.Investor-owned utilities are legal monopolies regulated by state commissions. When a utility wants to raise its rates, it must go through state commissions.Companies in other states, like Arizona Public Service Co. and DTE Energy in Detroit, are already lowering their monthly rates in light of the corporate tax cuts passed by Congress last year. Duke is seeking its first rate increase in Northern Kentucky in 11 years. Duke cites a need to make "critical infrastructure investments in its electric generation and delivery systems," according to a Duke news release.On Feb. 1, Duke Energy pledged to lower rates in North Carolina because of the tax reduction."This is a unique opportunity that … [Read more...] about Duke’s NKY rate hike proposal: Will corporate tax cuts mean residents get spared?