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?
Republicans in the Minnesota House want to make it easier for the recently enacted corporate tax cuts to result in lower energy rates for consumers. State Reps. Pat Garofalo, R-Farmington, and Nolan West, R-Blaine, said at a news conference Tuesday that the 40 percent reduction in corporate taxes approved by Congress in December should be worth $200 million to Minnesota utility companies. They want to see that savings passed on to energy consumers in the form of lower prices rather than landing in the companies’ coffers. “This means more money in the pockets of families, small businesses and large energy users,” said Garofalo, who chairs the House jobs and energy committee. “As we all know, high energy prices kill jobs.” The Minnesota Public Utilities Commission regulates the rates charged by energy companies to make sure they are fair and reasonable related to the cost of delivery. Dan Wolf, a commission spokesman, said the agency started studying the … [Read more...] about House GOP lawmakers say corporate tax cuts should mean lower energy rates
Donald Trump’s federal corporate tax cut delivered a $7.2 billion profit to Sprint during the final months of last year, the Overland Park-based company said Friday. Sprint said the profit stemmed from “a remeasurement of our deferred tax assets and liabilities under provisions contained in the new tax law.” Additional information was not available though Sprint executives plan to discuss the quarter’s results during a conference call with analysts. The $7.2 billion profit dwarfed Sprint’s typical financial results during the quarter. A year ago, Sprint’s had lost $479 million in the quarter. Its revenues from selling wireless services during October, November and December totaled $5.93 billion. Sprint reported a net tax benefit in the quarter of $7.052 billion. Without that benefit, profits measured $104 million for the quarter. Operating Sprint’s businesses generated $727 million in earnings before the company covered costs not directly tied … [Read more...] about Sprint plucks $7.2 billion profit from Trump’s corporate tax cut
(The Conversation is an independent and nonprofit source of news, analysis and commentary from academic experts.) Thomas Kochan, MIT Sloan School of Management (THE CONVERSATION) Over 200 CEOs have said they will raise wages or give bonuses as a result of the large corporate income tax cut passed late last year by Congress. Some view their plans as simply a public relations move, others as a response to tighter labor markets or worker pressures. Pretty much everyone hopes that it might signal a new era in which corporate leaders share earnings with workers in ways they have not done in the past. I’m among those who hold such a hope. Only if such profit sharing becomes the norm will the long-term trends in widening income inequality and wage stagnation be reversed. But why should this decision be left to CEOs? Don’t workers have a legitimate claim and stake in what is done with the profits they help produce? New research I’ve been leading at MIT finally gives … [Read more...] about Here’s how workers would spend the corporate tax cut – if they had a voice
By Ryan Maye Handy Published 10:03 am, Friday, January 26, 2018 Photo: Michael Ciaglo, Staff Image 1of/1 CaptionClose Image 1 of 1 CenterPoint Energy master tech Jeff Rainosek works on the mobile transformer controls as crews work to reroute lines around a flooded substation to power to affected customers Sunday, Sept. 3, 2017 in Houston. ( Michael Ciaglo / Houston Chronicle) less CenterPoint Energy master tech Jeff Rainosek works on the mobile transformer controls as crews work to reroute lines around a flooded substation to power to affected customers Sunday, Sept. 3, 2017 in Houston. ... more Photo: Michael Ciaglo, Staff PUC wants to examine CenterPoint's rates in wake of corporate tax cuts 1 / 1 Back to Gallery The chairman of the Public Utility Commission has asked that Houston-based electric utility … [Read more...] about PUC wants to examine CenterPoint’s rates in wake of corporate tax cuts
With the Governor’s proposed budget scheduled to be unveiled in less than a week, and in light of recent Delaware Economic and Financial Advisory Council (DEFAC) reports purportedly showing an uptick in revenues, it is incumbent upon me, as an elected official, to alert the taxpaying public to the reality and complexity of Delaware’s economic situation.While increased revenue projections might appear to be welcome news, a number of factors should be considered in the final analysis. The specifics of the revenue gains and revenue shortfalls should be taken in the context of sustainability and specificity, with close scrutiny applied to future trends. More from this writer: Taxpayers should fight corporate welfare The December Delaware Economic and Financial Advisory Council report is a case in point. While projecting more revenue ($23.9 million) available in fiscal year 2019 than projected in September, it also notes a slight decrease in estimated revenue for … [Read more...] about Corporate tax cuts are undermining Delaware’s budget: Delaware Voice