With some of the lowest approval ratings in the history of modern America, President Donald Trump announced his long-awaited tax reform plan in the hopes of deflecting attention away from his approval numbers.
The president announced his plans recently that seems to benefit corporate America more than it does low-income and middle-class Americans. The plan seeks to eliminate the alternative minimum tax, which would have saved President Trump millions in taxes, while cutting the tax rates on corporations. President Trump’s tax reform proposal also aims to end the estate tax.
Many Republican pundits argue that corporations on America today pay some of the highest taxes in the world. On paper, one can argue that corporations do pay some of the highest rates. However, most corporations do not pay anywhere near the 35 percent federal tax rate and the profits those big companies generate are some of the largest in history.
According to the Government Accountability Office, two-thirds of large corporations pay no federal taxes, and some of the biggest and most profitable companies only paid an average rate of 14 percent.
Several studies show the effective tax rate corporations pay is in the same ballpark as most other industrialized companies. Along with reducing corporate taxes, the plan would allow some business owners to pay their taxes at the lower corporate tax rate instead of paying personal income taxes. The bottom line on President Trump’s tax reform proposal is this; it will cause the federal debt to rise by $7 trillion in the first decade of the plan, according to the Tax Policy Center.