In: Accounting
HOW DOES TAX CUTS JOB ACTS IMPACT ON BUSINESSES BOTTOM LINE? Who’s paying Corporate Taxes – And who’s not, How does TCJA affect Small Businesses Owners and its bottom line?
Prior to the Tax Cuts and Jobs Act ,the United States corporate income tax was widely regarded as uncompetitive for three main reasons
The Lawmakers made significant changes to each of these factors in the new tax law enacted in December 2017
1.One of the most significant provisions of this Act is the permanently lower federal corporate income tax rate, which decreased from 35 percent to 21 percent.
Benefits for lower federal corporate income tax rate are as follows
How Lower Business Tax rate Raises worker pay?
The new, permanently lowered corporate tax rate makes the United States a more attractive place for companies to locate investments and will discourage profit shifting to low-tax jurisdictions. The lower rate incentives new investments that will increase productivity, and lead to higher levels of output, employment, and income in the long run. By permanently lowering the corporate tax rate in the Tax Cuts and Jobs Act, lawmakers succeeded in making the United States a more globally competitive location for new investment, jobs, innovation, and growth.