Analysts at UOB noted that the Trump administration outlined its long-awaited tax plan on Wednesday – slashing the federal income tax rate to 15% for corporations from the current rate of 35%.
“It also levies a one-time tax on an estimated $2.6 trillion in profits that U.S. multinationals have stashed away overseas. The plan would also adopt a territorial tax system, which means most profits earned overseas would not be subject to U.S. taxes. Trump’s plan also seeks to streamline the nation’s inefficient tax system, including cutting the number of income tax brackets from seven to three. It would also eliminate tax deductions with few exceptions.
Overall, the plan offered too few details to immediately assess its economic impact. Trump’s goal of reforming the nation’s tax code is expected to face fierce resistance among congressional Democrats and even members of his own Republican Party, who are divided about whether the plan should be “revenue neutral”. The one-page summary of the tax plan said the Trump administration will hold listening sessions with stakeholders and continue working with both houses of Congress during the month of May.”