American plans to cut corporate tax rate move a step closer
The US House of Representatives took a step yesterday to pave the way for reducing the US's corporate tax rate to levels sought by President Donald Trump and Republican leaders.
The outline of the Republican plan announced last month would cut the corporate tax rate to 20pc from 35pc, the small business rate to 25pc from up to 39.6 pc and the top individual rate to 35pc from 39.6pc.
Ireland's corporate tax rate, of 12.5pc, has proved of great interest to Trump who has committed to attracting American companies back to the US.
He has previously commented on Ireland's corporate tax rate in his first major tax reform where Ireland was named among a list of countries with a low corporate tax rate.
However, the tax element of the plan proved more contentious with the plan barely overcoming a revolt within party ranks that could foreshadow trouble ahead for the tax overhaul. The Republican-controlled House voted 216-212 to pass a budget blueprint for the 2018 fiscal year. The measure will enable the tax legislation - expected to be made public next week - to win congressional approval without any Democratic votes. But House Republican leaders came within two votes of failure. Democrats were unified in their opposition, and 20 Republicans also voted against the bill, many to express disapproval of a provision in Trump's tax plan outline that would repeal an income tax deduction for state and local taxes.
Discord is also looming over a potential provision to scale back a popular tax-deferred retirement savings program.
Those provisions are aimed at offsetting losses in tax revenues that would result from the planned sweeping tax cuts, particularly for companies. Reuters