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Tax breaks for the US companies and individuals

 Breaking News
September 29
10:30 2017

The Financial Times has published the information about the initiative of the Trump’s administration and leaders of the Republican party.

A draft reform of the taxation system was presented. It is proposed to reduce taxes for both companies and individuals.

This is the second edition of the initiative. Earlier, the presidential administration presented a one-page project, which formed the basis for the current nine-page document. This document cannot be called a draft law as it contains many proposals of an optional nature and needs global improvements.

Nevertheless, some features of the future taxation system are already clear. So, the companies are proposed to tax 20% (now the rate is 35%). We recall that this measure will increase the attractiveness of the United States for international companies. Currently, the average income tax rate for large firms is 22.5%. Nowadays, in France the rate is estimated at 34%, in Japan – 23%, in Australia – 30%.

The new tax scheme aims to return the profits of the corporations from abroad. To achieve this goal, it is planned to reduce the profits repatriation tax.
It is also planned to reset a tax on the international profits of companies (currently its value is 35%).

As for the taxes for individuals, it is planned instead of a seven-step scheme move to a simpler four-stage one. The upper lath will decrease from 39.6% to 35%. The highest rate is given to the wealthiest part of the US population.

Plans for changing the tax legislation are supported by large US companies and citizens. However, there are also critics of the project; in particular, skeptics are busy with the issue of replenishment of the budget funds that were not received as a result of the tax reform.

According to analysts, future changes will have a positive effect on the behavior of the national currency.

The material was prepared with the participation of Andrey Majorov,
a leading analyst of the brokerage company CT Trade

 

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