The Story:
Talking to CNBC, Morgan Stanley CEO James Gorman said that the GOP’s plan to bring down the corporate tax rate from the 35% range to the 20% range would be a big boost for the economy.
He made a clear argument that when you have major countries around the world sitting in the 15% to 20% tax bracket, it becomes difficult for the United States, at the current rate, to stop companies from taking advantage of lower tax available outside the country.
Corporate Tax Rates in Major Countries (KPMG)
- United States: 40%
- Australia: 30%
- Germany: 29.79%
- Canada:26.50%
- China: 25%
- United Kingdom: 19%
- Ireland: 12.50%
- Singapore:17%
The effective corporate tax rate in the United States is actually higher than 35% because state and local governments add on to the federal government’s tax bill, pushing the effective rate closer to 40%.
What did Gorman say?
“For the U.S. to be so much off market, it’s going to lead to corporations doing things you would not normally do in terms of shifting revenues offshore, the kinds of inversions we saw a few years ago, etc.
“Right now, anywhere in the 20s would be a very positive thing and stimulating for the economy.
“The administration knows that they if don’t get this tax plan done, 2017 was a wasted opportunity.”
You can watch the interview here:
Morgan Stanley CEO: US corporate taxes should be in 20% range from CNBC.
