Will Not Optimistic Trump Tax Changes Will Stick
University of Indianapolis Associate Professor of Finance Matt Will says President Trump's proposed tax code overhaul, if approved, would be a "gamechanger" for corporate America. Highlights of the plan rolled out Wednesday include reducing the corporate tax rate from 35 percent to 15 percent, which would move the United States from nearly the highest in the world to the middle of the pack. Trump is also calling for a drop in the current top-end tax rate on individuals -- from 39.6 percent to 35 percent -- which is less of a cut than he touted during the campaign.
The plan also involves simplifying the individual tax code by eliminating all deductions except for mortgage interest and charitable contributions.
On the corporate side, Will believes the best part of the plan is to reduce taxes on foreign profits to "little or zero," a move he says that would keep profits earned overseas by U.S.-headquartered companies from being taxed when they're returned to the U.S. "That is a major improvement," Will says, "because that has been what is causing companies to leave the United States, so this is going to cause companies to say 'look, it's okay to have a headquarters in the United States, because I'm not going to be punished' relative to a company that doesn't have a headquarters in the United States."
In an interview with Inside INdiana Business, Will says he is not convinced the proposal, as it stands, will win out. "If you're going on his track record, I would not be too optimistic," Will said. "Remember: the tax code is the ultimate pork barrel object. There are so many special provisions in there. You and I have maybe dozens of pages of tax code we've got to read for our individual taxes, but when it comes to corporate taxes, it is a stack taller than the height of a two story building. I mean, there's so many pages and pages of nuanced tax code that that's where the dirt and the fighting is going to occur."