Tax

Part of the Trump tax cut back in 2017 was reducing the corporate tax rate from 35% to 21% and was in effect January 1, 2018. This resulted in an increase in government revenue from $3.3 trillion in 2017 to $4.9 trillion in 2022. Trump is now proposing to reduce the corporate rate to 15%. In the past when corporations increased profits, they often used the money to increase dividends or buy back stock when increasing production would have been of more benefit to the entire country. This time it may be different because another part of Trumps economic plan. The tax reduction only applies to companies that manufacture goods inside the United States. This is designed to increase American jobs and productivity and if successful could help control inflation. Another part of his plan is to increase production of fossil fuels while decreasing the regulations and this will in turn lead to lower cost for transportation which will lower the cost of all goods. Transportation cost amount to 9 to 14% of the cost of finished goods. This will be combined with increasing import taxes. This is part of the make America great idea. All of this flies in the face of the old idea that presidential candidates can lay out plans but not the specifics of how they will carry out these plans. All of this will reinforce the move away from globalization and a move toward reshoring.