As the late senator from Washington state, Warren Magnuson, who served for more than 30 years in Congress, once said, “All that each industry seeks is a fair advantage over its rivals.” Wilt Chamberlain had a fair advantage on the basketball court because he stood 7-foot-1. It allowed him to score 100 points in a single game.
The Trump 2.0 tax bill, now moving through Congress, should establish a fair advantage for U.S. companies.
Tariffs are, of course, Donald Trump’s retaliatory stick to stop foreign countries from discriminating against goods and services made in America. Everything from our dairy to our wheat, our pharmaceuticals, and our digital tech products is punished by the taxes and tariffs charged in Europe and Asia — especially China.
But Trump also wants an additional carrot approach to increase domestic production from Maine to Michigan to Montana. Trump wants Congress to pass a 15% corporate tax rate, down from the current 21% rate.
That’s a real sweetener. The U.S. would slide down the tax scale from once having one of the highest corporate tax burdens (35% as recently as 2017) to having close to the lowest in the world starting next year.
This would suck capital investment back to America in a nanosecond and financially seduce companies to reshore factories, labs and headquarters back here with bargain-low tax rates. When Ireland cut its tax rate to the lowest among industrialized nations at 12.5%, it became the fastest-growing nation in Europe, and its tax receipts soared.
The 15% corporate tax rate can be easily “paid for” with the higher tariff revenues collected from the 10% tariff rate that now applies to all nations and the higher duties on nations that won’t negotiate.
The Trump grand vision is to create a level taxation playing field by imposing higher tax rates on products made in places like Beijing and then lower taxes on things made in Baltimore. Since other nations impose value-added import taxes and tariffs of up to 25% on products with the “Made in America” label, the 15% corporate tax here at home makes perfect sense as a counterpunch. This isn’t protectionism — I believe fervently in the benefits of international trade — but simply a shrewd and legal (per the General Agreement on Tariffs and Trade) strategic move to put American companies and workers first.
From my first meeting with Trump back in January 2016, when he was running for president, to the current day, he has always talked up the 15% corporate tax rate for all businesses.
Recently, Trump has been telling Congress, if they won’t lower the corporate tax rate to 15% for all American companies, then offer this lower rate on business profits of companies whose products are predominantly made and manufactured in the USA. This could easily be paid for with Trump’s new across-the-board tariff.
There’s a lot of dimwitted chatter in Washington about RAISING tax rates so that the rich pay their “fair share.” That would only handicap our own business owners and benefit our competitors.
By contrast, the Trump 15% corporate tax rate would give American companies and workers a major leg up in international markets. Studies by economists at the American Enterprise Institute find that this “fair advantage” tax policy would lead to higher wages for American workers and higher share prices for American shareholders and retirees. That’s a good way to put America first.
Stephen Moore is a visiting fellow at the Heritage Foundation. He is also an economic advisor to the Trump campaign. His new book, coauthored with Arthur Laffer, is “The Trump Economic Miracle.”
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The problem with what the author writes here is the GOP controlled Congress is not composed of people like Trump, Musk, Bessent or the rest of President Trump’s Cabinet. It is composed largely of career politicians. Many of whom have never worked in the private sector, don’t understand economics or anything much outside the basics of the legal profession. They certainly don’t have a clue about anything related to life outside the insular world within the Washington, D.C. beltway. So, while the President and his people may know what the best may be for the United States economy and country as a whole over the long-term, the professional political class is NOT used to making bold, courageous decisions or taking political risks that might cost them their next re-election bid.
Congress, by the nature of the type of people who have populated it for well over half a century now, has been dominated by what would best be described as “go along to get along types”. People who poll test virtually every decision before they make it twice to ensure it doesn’t ruffle anyone’s feathers.
If the author is expecting Congress to step up and legislate bold, pro-growth and permanent tax initiatives to ensure long-term economic growth and prosperity, while both the MSM and the Democrats are fear mongering non-stop about how anything like it would “destroy our democracy”, then he is sadly going to be disappointed. He needs to read the watered-down version of the House reconciliation bill being put up on-line this week to see what Congress actually produces.
The American public has been brainwashed and taken advantage of for so long, that over half our population is still stupid to the fact that we are a Constitutional Republic, based on Capitalism. We are also a nation of laws and no one is beyond the law. Gitmo should be filling up shortly.
International trade may have benefits but we have grossly abused that. People here need to have competitive jobs so they can afford to live. There is absolutely no reason why American workers cannot be trained to build high-tech products here and beef and diary products should never be imported from anywhere.
CUT Taxes for ALL American made products
Once upon a time 50years ago everything was made in USA and it showed, lasted for ever, then Detro9it moved to Japan and all changed, not for the better.
Trump is a businessman. Let him “do his thing.” As for the republicans, there are quite a few Rinos as well as those where dementia has set in. For heaven’s sake pass the budget bill!
CONGRESS B E T T E R GET IT DONE FOR A M E R I C A AND THE PEOPLE!!
All this sounds good but tariffs and taxes are always paid by consumers in price increases. Also, when is anyone going to talk about UNIONS in conjunction with manufacturing? Unions have cost this country a lot cuz labor is one of the highest cost in any business! Unions demanding wage increases and other demands that drive costs up so much that Americans can’t afford the products produced needs to be addressed also! It’s one of the reasons companies went overseas in the first place!
Corporate tax rates may be a piece of keeping manufacturing in the U.S. But the biggest factor is labor costs. We should focus on high-tech manufacturing. Even China doesn’t want to make tube socks anymore. It’s cheaper for them to outsource to Vietnam or Bangladesh.
Before we get too deep into the nuts and bolts of this discussion we need to determine and define what is an American made product. Exactly how much of the product has to actually be produced in America(1), manufactured in America (2) and assembled (3) in America to be labeled an American made product. If the materials to make the parts are not produced or manufactured in America is it an American product? We tend to think that if it’s assembled in America it’s an American product. Among car makers the American Corvette is the most American made vehicle. Maybe we should layer a bigger tax break to match how much of the product is actually made in America. Where assembling would be 15%,manufactoring your own parts in America 15%, and production of the materials to make those parts would be 15%. That would give these companies an incentive to make American make products.