Question

Please respond with at least 250 words

It was estimated back in 2015 that Apple saved over $59 Billion dollars by simply keeping its money overseas. By studying what you have realize that Apple is not alone in doing what they have been doing, do you agreed with President Trump to lower the Corporate Tax to 15% so these companies with bring these dollars back to the U.S.? If so, will this money stimulate the economy or not? Please justify your answer.

Answer 1

President Trump in his recent statements has expressed his desire to bring down the Corporate Income Tax to 15%from 35%. He wishes to do this with the view to bring the Tax Rate at par with China's Tax rate which is as low as 15% for some groups of Tax Payers. He believes this would bring the US Economy in parity with other developing economies and act as a level playing field for the Industries.

It is well known fact that Corporations in US like Apple have kept their Funds Abroad so as prevent higher taxes on them. Funds are maintained in Tax Heaven economies like Cayman Islands so as to enjoy Tax Benefits.

Bringing the Corporate Tax Rate to 15% would act as an facilitator for Business and would benefit the industry. This would encourage Corporations like Apple to bring back their money from Abroad and Invest them in the US economy.

The money brought from abroad would be held in US Bank Accounts which would increase their finance capacities. Also the Corporations would utilize this fund either to set up industrial plants, expand business or Invest some portion in Financial Markets.

Thus, we can see that reducing the Corporate Taxes would benefit the whole economy.