The new tax act helped individuals and corporate income tax fliers, however, in doing so it also
made certain aspects of filing taxes more complicated. Certain aspects of the code such as lowering
the corporate tax to a flat 21% rate, as well as increasing the individual's standard deduction across
the board benefited filers without much hassle, however, new rules such as the QBI deduction for
individuals can be seen as complex when learning all the rules required to qualify for the
deduction. I believe that it would nearly be impossible to change the tax code in any way without
making it complicated currently, although we are able to change the code to benefit that taxpayer,
the new deductions, credits, or limitations create a complicated maze of instructions one must
follow to completely understand the new implemented rules.
have we become more competitive with other countries?
I believe that the U.S has begun a shift to try and be more competitive with other countries
regarding our international tax system. I do not think it will ever be possible for the U.S to be seen
as a "tax haven" for international organizations, but by bridging the gap it creates an environment
where the U.S sees less organizations shifting their ownership of intangibles to lower tax
jurisdictions. Then U.S will never be in the same category as Ireland or Singapore when it comes to
tax brackets, Soley based on our countries size and economy of scale, however, by lowering the tax
rate for corporations to a flat 21% the Tax Cut and Jobs Act made it less incentivized for
multinational organizations to avoid paying tax in the U.S.
Why is international tax so important to the U.S. tax code?
International tax is vital for the U.S. tax code for the country to stay competitive with other
countries regarding economic growth, promote job growth, and to encourage profits and property
held within the country by multinational organizations. Because of all of this it is vital that the
country continues to update the Tax code to stay relevant globally, and to continue to incentivize
organizational growth within the country. If outdated tax codes were never updated, it would be
very likely that we would see a decline in our economy due to a lack of job growth, and smaller
governmental budgets due to less income from taxed multinational corporations.
Do you think that the new tax act helped or further complicated the tax code?
I believe that the tax code helped. In 1986, the president Ronald Reagan signed new reform
legislation. Most corporation then were traditional corporations and most US companies earned
their income from revenue and sales within the United States (White & Lorenzo, 2017). a In 1986, 71
percent of business were traditional C corps and 29 percent from pass throughs. a That is not the
case now. a In 2012, 40 percent of business income came through C corps and 60 percent from pass -
throughs (White & Lorenzo, 2017). a The new tax code of the 2017 Tax Cuts and Job Act (TCJA)
increased the incentive for US corporations to shift their profits back over from the low-tax
countries back to the United States and pay less tax than the country that the income was derived
from (“what are the consequences of the new US international tax system?”, 2023). a This helped to
bring the money back so that it could have an economic impact on the US economy using the taxes
paid. a With the Global Low Tax Intangible Income (GILTI) in 2018 the tax rate was 10.5 percent if
you would shift the intangible income to the US which is lower than the US corporate rate of 21
percent. a This helps to shift the income from international income back to US based and pay less
tax then where the income was produced from an American based company.
Have we become more competitive with other countries?
a a a a a a a a a a I believe we have become more competitive with reducing the tax on low tax location. a In
2017 before the TCJA, Non-US profits from US multinationals the Netherlands, Ireland,
Luxembourg, UK, Bermuda etc. had lower tax rates than the US (“What are the consequences of
the new US International Tax System?”, 2023). a Now after the TCJA, it begins with 2018 of 10.5
percentage becoming significantly lower than the countries I have stated before making them more
competitive with the low tax countries. a This gives the incentives to have the business to bring back
the income so its taxes lower and gives the business more funds to invest overseas and stimulate
the economy.
Why is international tax so important to the U.S. tax code?
a a a a a a a a a a International tax is very important to the U.S tax code because the world is more globally
links now than ever before. a International tax applies income companies earn from their overseas
sales. a With international taxes, the US could develop tax treaties between countries to collect tax
revenue, credits and be able to apply the anti-avoidance rules to limit gap countries from allowing
companies to minimize tax burden (International tax rules, 2023).
Reference:
International tax rules. Tax Foundation. (2023). https://taxfoundation.org/tax-basics/international-
tax-
rules/#:~:text=International%20tax%20rules%20apply%20to,minimize%20their%20global%20tax%20
burden.
What are the consequences of the new US International Tax System? Tax Policy Center. (2023).
https://www.taxpolicycenter.org/briefing-book/what-are-consequences-new-us-international-tax-
system
White, B., & Lorenzo, A. (2017, November 11). Not your father’s economy. POLITICO.
https://www.politico.com/story/2017/08/11/globalization-drives-tax-reform-trump-congress-
241513
Details and analysis of the 2017 tax cuts and jobs act. Tax Foundation. (2023, May 30).
https://taxfoundation.org/2017-tax-cuts-jobs-act-analysis/
Scott Drenkard and Scott Greenberg, “Explaining the Pass-Through Income Anti-Abuse Rules in the
Tax Cuts and Jobs Act,” Tax Foundation, Nov. 3, 2017, https://taxfoundation.org/pass-through-anti-
abuse-rules-tax-cuts-jobs-act/.
