Donald Trump has promised significant economic growth during his administration and a tax attorney says passing Trump’s corporate tax cut in his first 100 days is critical in making that happen.
Gayle Trotter is also a media analyst and a senior fellow at the Independent Women’s Forum. She says while Trump wants to see many different facets of tax reform, dropping the corporate tax rate from 35 percent to 15 percent is the linchpin to jump-starting an economy that has endured very small growth in recent years.
“This is an important point that Donald Trump spoke about extensively during his campaign and it’s something that people on both sides of the aisle can respect. There will be bipartisan support for Donald Trump’s policy of lowering the federal corporate tax rate,” said Trotter.
Right now, of the 35 most nations that take part in the Organization for Economic Cooperation and Development, or OECD, the United States has the highest corporate tax rates.
“When you look at that, you understand that American companies are put at a competitive disadvantage right out of the gate, because if these other companies have the ability to be at a 15 percent tax rate or even lower, then they right there have a competitive advantage economically to American businesses,” said Trotter.
As a result, multiple major corporations such as Pfizer and Burger King have elected to pursue corporate inversions, which is the process of setting up headquarters in more tax-friendly nations.
Trotter says Trump’s commitment to get government off the backs of businesses is paying dividends even before he sworn in to office.
“Because he’s going to do many, many other business-friendly policy changes from the White House, corporations are going to have the benefit. This policy, as a tool of his overall policy to make America competitive again, is going to have the advantage that we see as bearing fruit even before Donald Trump takes the oath of office,” said Trotter.
“We saw it this week with Ford, that they are not going to do a new factory outside of the United States and that it’s better to invest that money in the United States,” said Trotter. “They said that the reason they were doing it is because they see this as a vote of confidence in the business-friendly environment that Donald Trump has promised to put into place.”
She says that’s a big change from how the Obama administration treats the business community.
“The current administration was trying to come up with all these complex rules to punish companies so they wouldn’t do tax inversions. Yet, President Obama and his administration could have done the easy suggestion that Donald Trump is going to implement, to just lower the corporate tax rate,” said Trotter.
Trotter expects some fierce opposition from Democrats, including renewed calls to raise taxes on the wealthiest Americans. She says the Democrats don’t have the numbers to push that idea, which is a proven loser.
“If you confiscated all of the wealth of all the wealthiest people in America, it cannot make a dent in the economic situation that our country is in right now, because of the tax and spend Congress that Republicans, unfortunately, frequently go along with,” said Trotter.
She says if Trump’s tax agenda is successful, the economic results will speak for themselves.
“We’re going to get to a three to five percent growth rate, which we haven’t seen to that extent in a long time. That’s going to give evidence that this type of change is good for the American people,” said Trotter.
Trotter also expects Trump to go hard after crony capitalism and work to remove loopholes and exemptions from the tax code. She says how to address the system comes down to a simple question.
“Is the whole point of taxation so that the federal government can fund its core purposes or is the core function of taxation in order to fund the pet projects of unaccountable politicians in Washington, D.C.?” asked Trotter.
She says any Republicans reluctant to scrap the status quo will likely be met with fierce public resistance.
“I think you are going to see remarkable change in the first 100 days, because if the Republican Congress does not back Donald Trump on his campaign promises, there is going to be a huge outcry and the congressional phone lines are going to melt down,” said Trotter.
