The GOP released its tax plan Thursday (Nov. 2), offering a glimpse into its Tax Cuts and Jobs Act that includes plans for corporate taxes.
According to reports in The New York Times, Republican tax reform efforts would impose a minimum global tax of 10 percent for American multinational corporations. The corporate or business tax rate would also be cut from 35 percent to 20 percent according to the new plan.
But, separate reports in Bloomberg Politics said an unnamed Republican lawmaker revealed the GOP will also look to phase out that corporate tax rate of 20 percent over the course of the next 10 years.
There is uncertainty surrounding when Republicans’ proposed corporate tax cut would come into effect and how long it would last, reports noted. But, the publication said that phasing out the proposed corporate tax rate cut “would limit its ability to spur economic growth — a key selling point cited by President Donald Trump and others.”
The overall tax plan also aims to reduce tax rates for some middle-class families. Representative Kevin Brady said the plan would cost $1.51 trillion over a decade, and reports noted lawmakers must stick to that budget in order to pass the bill in Congress.
According to Representative Carlos Curbelo (R-Florida), a member of the House Ways and Means Committee, this marks a beginning for Republications to overhaul the nation’s tax code.
“This isn’t the last product,” Curbelo said. “This is just the kickoff to this tax reform exercise.”
It’s not yet clear how the proposed tax changes would affect small and medium-sized businesses (SMBs), but, according to a previous survey conducted by Thomson Reuters and PayNet and released in May 2017, SMBs should not necessarily be encouraged by the premise of corporate tax cuts. In fact, researchers found that small business borrowing has not been affected by plans for corporate tax cuts.