Not for the first time, President Trump has me confused about his tax policy.
The signature legislation of his presidency was the 2017 Tax Cuts and Jobs Act (TCJA). Among other things, that law moved the US more in the direction of a territorial tax system, where the US taxes profits made in the US, and away from a system where we tried to tax US-based multinational firms on their worldwide earnings.
But now, the president seems to have turned his back on that achievement. In a Dec. 3 press conference, Trump blasted France for its new 3 percent digital services tax on income tech firms make in France: “I don’t want France taxing American companies,” he said.
Trump summarized his new view on taxing US-based multinationals this way: “They’re our companies, they’re American companies. If anyone is going to take advantage of the American companies, it’s going to be us. It’s not going to be France.”
Does he really mean that only the US should tax US-based multinationals on their income, no matter where they earn it?
Trump’s curious belief
Leaving aside the president’s curious belief that making US corporations pay tax is somehow “taking advantage” of them, Trump is headed down a counter-productive path. And his journey may be even more costly for US firms and consumers because he wants to press his case by imposing $2.4 billion in new tariffs on French imports—a step certain to result in retaliatory French taxes on US exports to France…..Read more>>