President Trump gave a speech on Wednesday from the South Lawn of the White House following the passage of the Republican inspired Tax Cuts and Jobs Act, marking a legislative victory for his administration which aims to reduce taxes while modifying policies and tax deductions for individuals and businesses.
Predicting that the passage of the new tax reform bill equates to more companies moving back to American shores, President Trump claimed that companies are going to stay in the U.S. and “we have companies pouring back into our country.”
“And that means jobs, and it means really, the formation of new young, beautiful strong, companies” President Trump said.
Later in his speech, President Trump predicted that we are going to bring back $4 trillion back to the U.S. that was frozen overseas and in other parts of the world.
Under the newly approved Tax Cuts and Jobs Act, the corporate tax rate is lowered to 21 percent from 35 percent and the tax on foreign income is modified.
Even with the new tax cuts and newly created incentives for corporations to bring home repatriated cash that is stored abroad in other countries, there is no guarantee that the Republican “trickle down” approach of lowering taxes will amount to corporations returning the cash to American shores for job creation.
If history is any guide, corporations are more likely to use the stashed cash for share buybacks for shareholders than for job creation on Main Street.
In 2004 the U.S. Congress approved a tax holiday for multi-national U.S. companies through the American Jobs Creation Act of 2004 that handed companies a tax holiday, allowing them to repatriate foreign profits to the U.S. at a reduced tax rate of 5.25 percent rather than paying the typical 35 percent corporate tax rate.
Senate Democrats used a report in 2011 to shows that the 2004 tax holiday for multi-national U.S. companies with repatriated cash abroad resulted in a cost of $ 3.3 billion for the U.S. Treasury while the multi-national companies who received a tax break actually eliminated 20,000 jobs.
Criticism About Lack Of Bipartisan Support With New Tax Reform Legislation
Senate Minority Leader Charles Schumer (D-New York) gave a press conference on Wednesday following the passage of the new tax reform bill and criticized Republican Senate Majority Leader Mitch McConnell’s earlier description of the Tax Cuts and Jobs Act from the Senate floor as an “open process” the new tax bill went through before it was approved this week.
“Sure they went through an open process, only if you define open by one party negotiating behind closed doors, having one markup, with only one expert witness, while voting down every single amendment proposed by Democrats” Sen. Schumer said.
Written and Edited By: