In case you have not yet heard—for example, if you have been on an extended hiking trip in the wilds of an American landscape that you thought was a national monument, until yesterday when some loudmouthed New York real estate faux-tycoon popped up to declare it wasn’t—it turns out that Republicans may be substantially bamboozling the public as to the contents of their tax bill.
For example, their supposed “anti-offshoring” move, which from the label on the tin you might expect to be a closure of the enormous tax loopholes encouraging United States companies to park their money overseas to dodge paying taxes on it, could end up encouraging even more corporate offshoring of infrastructure, workers, and profits.
The Republican tax plan can be divided into three buckets: individual, corporate, and international. That last bucket creates new incentives for companies to move factories overseas and shelter money in tax havens. […]
The territorial model that the GOP is pushing would create an additional incentive to invest in countries like Ireland where the corporate rate is significantly lower than the United States. Republicans believe the differences won’t be big enough to drive investment abroad. Steve Rosenthal, a senior fellow at the Tax Policy Center, disagrees, saying that’s still “plenty of juice” to encourage companies to shift production to countries with lower tax rates. Kimberly Clausing, an expert in international taxation at Reed College, writes that the shift to a territorial system “makes explicit, and permanent, the preference for foreign income over domestic income.” She estimates that profit shifting already costs the US government more than $100 billion per year.
Oh my goodness, could such a thing be accidental? An oversight? Donald Trump super-pinky-promised his supporters that the tax bill would be good for American workers and bad for offshoring companies, so it would be strange if Republicans just happened to choose language that could be nullified by any corporation willing to play a bit of rote gamesmanship with their numbers.
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