President Donald J. Trump delivers remarks on America’s Energy Dominance and Manufacturing Revival Tuesday, Aug. 13, 2019, at the Shell Pennsylvania Petrochemicals Complex in Monaca, Pa. (Official White House Photo by Tia Dufour)
Should companies that move jobs and manufacturing lines overseas be rewarded by the American people with tax breaks? Judging by the opinions of “economists, corporate leaders and others” interviewed by The Wall Street Journal, you might think that’s a bad idea. But they are upset with Donald Trump’s proposal to cut the corporate income tax rate to 15% for companies that make products in the United States. They might be correct in a world that was operating with pure free trade, but anyone with a pea brain can understand that U.S. manufacturers are up against heavily subsidized Chinese competitors whose sole intent is to deplete the American manufacturing base. The Wall Street Journal explains how the establishment feels like this is somehow a bad idea:
On Thursday, Donald Trump pledged to New York’s business elite that he would “once again turn America into the manufacturing superpower of the world.”
To do so, he said, he would cut the corporate tax rate to 15% from 21% for companies that make their products in the U.S., and expand tariffs on foreign-made goods.
The proposal raised immediate questions from economists, corporate leaders and others. Among them: What counts as American-made? And would his plan spur manufacturing, or launch a costly trade war?
The benefit would be “solely for companies that make their product in America,” Trump told a lunchtime audience at the Economic Club of New York. “If you outsource, offshore or replace American workers, you are not eligible for any of these benefits. In fact, you will pay a very substantial tariff when a product comes in from another country.”
The proposed tax cut would revive a type of perk that Trump’s 2017 Tax Cuts and Jobs Act eliminated. Before that law, the U.S. had a tax break that amounted to a special lower rate for domestic manufacturers. Companies could deduct 9% of their domestic-production income, effectively reducing their tax rates to as low as 31.85% from 35%. At the margins, targeted tax breaks can encourage companies to engage in preferred activities, but they can also reward companies for doing what they were doing anyway.
Read more here.
PRESIDENT TRUMP: “To further support the revival of American manufacturing, my plan calls for expanded R&D tax credits, 100% bonus depreciation, expensing for new manufacturing investments, and a reduction in the corporate tax rate from 21% to 15% solely for companies that MAKE… pic.twitter.com/9V2vv53Vyd
— Trump War Room (@TrumpWarRoom) September 5, 2024
If you’re willing to fight for Main Street America, click here to sign up for the Richardcyoung.com free weekly email.
