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Seven impacts of US tax reform

Seven impacts of US tax reform

President Trump’s tax reform plan was released on April 26, 2017, and despite coming with the subtitle “The Biggest Individual and Business Tax Cut in American History” it was a succinct one-page list of bullet points. While we should expect more details in the coming weeks as draft legislation hits the House floor by the end of August, the one-page list and the subtitle gave us some clues on the general direction of the reform: huge tax cuts. The cornerstone of the tax reform plan is cutting the federal corporate tax rates from 35%, the second highest among the OECD countries, to 15%. The stated policy objective behind this cut, and other disclosed aspects of the reform, is to encourage US multinationals to repatriate to the US cash and income that is currently…
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Understanding legislative intent behind tax advantages

I recently got into a debate on corporate tax avoidance with some students who were members of the Tax Justice Network. Their main argument was that tax laws are created specifically to cater to certain corporate interest groups at the expense of the society. While there might be some truth to it, I find that it a rather simplistic understanding of how or why tax advantages for certain groups are created.To better understand corporate tax avoidance (which I distinguish from tax evasion--or illegal tax planning) a more comprehensive understanding of the legislative intent behind certain laws is necessary. Just because a multinational is disproportionately benefiting from a particular law, does not make the law wrong.The legislature in Canada has created certain laws that are intended to benefit Canadian multinational corporations, because it…
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