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from the that-will-help-reduce-the-deficit,-right? dept.
The White House and congressional Republicans are finalizing a tax plan that would slash the corporate rate while likely reducing the levy for the wealthiest Americans
[...] The plan would likely cut the tax rate for the wealthiest Americans, now at 39.6 percent, to 35 percent, people familiar with the plan said Monday. They spoke on condition of anonymity ahead of a formal announcement.
In addition, the top tax for corporations would be reduced to around 20 percent from the current 35 percent, they said. It will seek to simply the tax system by reducing the number of income tax brackets from seven to three.
[...] Republican senators on opposing sides of the deficit debate have tentatively agreed on a plan for $1.5 trillion in tax cuts. That would add substantially to the debt and would enable deeper cuts to tax rates than would be allowed if Republicans followed through on earlier promises that their tax overhaul wouldn't add to the budget deficit.
https://www.apnews.com/d7929cdd15c3437db07147d219b391c4
(Score: 5, Informative) by n1 on Tuesday October 17 2017, @04:03PM
My understanding of how it works now (I am not a PwC/KPMG/Deloitte account manager) ... US corporation gets a loan using offshore division as collateral... or, US corporation borrows from offshore division directly... It's all cheaper than any taxes, and even if it's only cheaper by a small amount, that's enough, and gives you more options later, having your cash in different divisions and jurisdictions, currencies etc when you're a large multinational corporation.
In the latter, this enables the US corporation to minimize tax even further by any potential profit from the capital spent ends up as fees and interest payments to the offshore company.
This is also done by individuals who run large companies... You get paid a token salary $1-$10,000 but you acquire loans using your stock holdings as collateral. So you can have a multi-million income from low interest loans, have an effective tax rate of 0% and pay a little interest, paid with your token salary, dividends or other investments, which may be tax deductible also.