The room where it happens: President Donald Trump met with business executives from some of America’s largest companies on Jan. 23, including Ford, Dell, Tesla and Dow Chemical. He told senior executives that he had set his sights on significant cuts to corporate taxes. As for the reduction of the corporate income tax rate, Trump revealed, “we’re trying to get it down to anywhere from 15 to 20 percent.”
The current federal corporate tax rate is 35 percent, and it averages 39 percent for companies when state taxes are added. Business leaders are eager to see their tax and regulatory burdens reduced. They have complained for years about what they view as an inhospitable business climate in the United States. Will lower rates, especially at the corporate level, increase productivity and growth as well as cajole companies to keep more jobs in the United States?
Currently, the United States has the third-highest corporate marginal tax in the world, representing corporate tax rate plus local and sales taxes. Trump’s intention is to lower the corporate tax rate from 35 percent to 15 percent, which would then make the United States one of the most tax competitive developed countries in the world. The theory goes that if businesses can keep more of their income, they will be more likely to spend it on research and development and business expansion. High corporate tax rates can discourage reinvestment and hiring, and it can also lead to foreign investors electing to keep their distance.
As a new administration brings a shift in priorities and renewed efforts for tax reform, now is the time to examine what the future holds as well as the impact of newly issued regulations and other developments in the tax code. The upcoming Federal Bar Association’s Tax Law Conference at the Ronald Reagan Building and International Trade Center in Washington, D.C. on March 3 will analyze proposed changes to the corporate tax code outlined above.
Join the Federal Bar Association Section on Taxation for the 41st Annual Tax Law Conference. Register at www.fedbar.org/taxlaw17 on or before Jan. 27 to take advantage of reduced registration rates! This conference is designed to provide valuable updates for all levels of tax practitioners. As an attendee, you’ll hear corporate taxation experts share their insight into tax issues facing corporations, as well as tactics for overcoming challenges and changes your clients are likely to face. It is an opportune time to connect with colleagues and policymakers for this full-day forum that examines how the changing tax law landscape affects one’s clients and practice.
Attendees will receive the tools and strategies necessary to explore a wealth of tax law insight, from corporate tax, partnerships and LLCs to trusts and estates as well as executive compensation and employee benefits. Sign up today for the 2017 Tax Law Conference to explore tax developments and emerging policy issues in sessions featuring notable speakers from the IRS, Treasury Department, Department of Justice and Congress. For information on the conference, please visit www.fedbar.org/taxlaw17.
Stacy Slotnick, Esq. holds a J.D., cum laude, from Touro Law Center and a B.A., summa cum laude, from the University of Massachusetts Amherst. She performs a broad range of duties as an entertainment lawyer, including drafting and negotiating contracts; addressing and litigating trademark, copyright, patent, and other IP issues; and directing the strategy and implementation of public relations, blogging, and social media campaigns.