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The proposed corporate tax cut by President Trump has been ruled

PRESIDENT’S TRUMP TAX CUT ON GLOBALIZATION

THE EFFECT OF PRESIDENT’S TRUMP TAX CUT ON GLOBALIZATION.

The proposed corporate tax cut by President Trump has been ruled by some critics as a bid to reduce his own tax. However, the advantage of the planned corporate tax reduction is quite remarkable and Its effect on globalization is note worthy. The last reform made to tax was in 2004 and the proposed reduction of corporate tax from 35% to 15% might be one of the best decision yet to be made. The corporate tax is a percentage of the profit made by a firm which is calculated with the constant tax rate after a deduction of the cost of goods and depreciation from the total revenue of the firm to give the amount legally owed to the government by the company.

 

The corporate tax reduction will encourage the immigration of companies outside the United States. This immigration will provide more jobs and reduce the level of unemployment. A reduction in the corporate tax lead to an increase in the profit of firms . This will benefit shareholders as an increase in revenue is directly proportional to an increase in dividend. This will also encourage investments and shareholding from within and

outside the country. Certain policies employed over time have been noticed to benefit a selected group of the general population but a cut in the corporate tax from 35% to 15% provides more profit for company owners and wages increment for workers. It also benefits customers through a reduction in the cost of goods and services. The cost of goods and services is also affected because the establishment of new companies due to a reduction in

corporate tax encourages healthy competition in the market reduction in price which makes goods and services more affordable. It also affects the price of goods and service as it discourages the practice of producing outside the country and then shipping into the country for sale. It makes raw materials available at a lower price and under less strict conditions. A reduction in the corporate tax also makes the filing of tax .

 


returns less complex and easier. Corporate tax cut effect on the economy is like pruning a tree for it to bear more fruit. The ways a reduction in corporate tax affect the economy is also reviewed on (keyword). A growth in the economy is encouraged by the establishment of new businesses, this reduces the need for importation, it does not completely eliminate it but reduces it remarkably. Although the return of many firms into the country and the establishment of new ones is bound to affect the economy of some countries that has built a strong economy via the presence of these corporations. It will also reduce the revenue of these countries. The opposite of the effects of the tax cut in the United States will be experienced by these countries. But looking on the brighter side, this change will encourage the countries involved to think of new measures to improve their economy. The corporate tax rate has made some major tech companies like Google and Facebook, establish in other regions with lower tax rates. This will be experienced by the affected countries and they might have to consider a reduction in their tax rate to encourage this firms to stay. For example, countries like Australia with a tax rate of 30% might start working on a plan to reduce its tax if the tax cut planned by President Trump is implemented.

When the United Kingdom increased its tax rate to 50%, the increase did not help the economy by increasing revenue, so it had to be reduced to 45%. This shows that a reduction in the tax rate has its benefit on the revenue of a country. This cut not only puts pressure on the affected countries but on the world. The proposed biggest tax cut in history might after all be what the world needs to prune its economy.

A reduction in the corporate tax also helps to lower and prevent corporate dept. Many firms have run into debt in a bid to meet up with the legal demands of taxes. A reduction in corporate tax will make it more bearable and reduce the incidence and tendencies of running into dept. Wealth creation is encouraged by the corporate tax cut as it benefits big companies but also the resultant job creation benefits the average citizen.

It ensures a proper distribution of wealth and Increases standard of living. A cut in corporation tax will encourage creativity as it breeds a good ground for new business ideas and investments. Due to the tax rate and conditions attached good business ideas have not been implemented as entrepreneurship is not encouraged The tax cut will motivate citizens to be innovative as creating a new business will be quite easy.

 


Though speculations has risen that the corporate tax cut will lead to an increase in deficit. Nevertheless, it is believed that the growth in the economy will prevent or manage well any deficit that arises. An unstable economy breeds an unsafe community with higher risks of crime and danger to life. A bid to create a bigger and stable economy by a reduction in corporate tax rate has a huge effect on globalization and should be well received as the economy is improved but also life expectancy is increased and the wellbeing of the whole population is tended to, you can find more about this at key person insurance business.