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Trump’s Proposed Corporate Tax Cut: In Perspective

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Editor’s Remarks:
Last week, US Secretary of State Steven Mnuchin announced what he called the “biggest tax cuts in US history”: as part of President Trump’s plans to overhaul tax in America, the administration wants to cut the US corporate tax rate from 35% to 15%. This is certainly a huge slash relative to what firms in America face now, but how does it compare internationally? Despite the US’ reputation for ‘big business’ its current tax rate places it higher than countries known for somewhat heavy-handed approaches to tax, like France. The new rate of 15% would bring it on a par with Canada and Germany. It’s no secret that Angela Merkel and Justin Trudeau are no fans of Trump’s attitude to the world around him, seeing his push to rejig the US’ trade and migration policies as unfairly and illiberally stacking the odds in America’s favour, but they could do well to stay quiet when it comes to some parts of domestic economic policy: their corporate tax rates are just as attractive as the US’ would be if Trump succeeds. This dynamic would change again if the President manages to get anywhere with his Dodd-Frank reform, though, which would doubly supercharge America’s appeal to big business.

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