The Wall Street Journal (WSJ) noted today that the focus in Washington will now turn to a tax overhaul.  How will the various parties in the capital focus on US corporate tax overhaul and will a border tax become reality?  How will this impact your business?  According to the WSJ the US has one of the highest corporate taxation rates in the world at 39.6%.  You must balance this “statutory corporate tax rate” with the net rate after expenses and deductions are applied to get the real picture, but the US still ranks 4th highest in the world in our “effective corporate tax rate” which presently stands at 18.6%.

The real question is how to apportion tax changes to accomplish the goal of many in Washington political circles: “an overhaul primarily focused on promoting economic growth.”  The Ryan-Brady plan for border tax adjustment believes taxing imports and exempting exports is the path forward.  The two authors believe it will generate $1 trillion to offset other cuts to the corporate tax rates and will all but eliminate transfer pricing issues and US companies using international entities and tax strategies to shift profits (and associated taxes) overseas to a much more attractive sovereign tax authority.  Senate republicans have already signaled their distaste for this approach, and leading US CEO’s have voiced substantial concerns about the impact on US companies as well as international markets and the response of foreign nations to a perceived US “border tariff.”

One thing seems certain: a US corporate tax overhaul isn’t going to happen overnight.  Radical changes such as a border tax do not have broad-based support, though change seems to be in the wind.  Our best advice to business and international clients is to sharpen your organizations ability to make rapid, well-informed decisions and to eliminate multiple layers of unnecessary corporate structure.  The experienced international and domestic tax and business attorneys, accounting and tax preparation teams and business advisory group are prepared to help structure a plan to reduce your existing tax exposures while helping to position your company for changes coming down the road.

Implementation of tighter controls and the capture of information at critical points throughout every aspect of your business will provide the critical information to inform the decisions you might soon face.  What impact will US corporate tax overhaul have on your business?  We invite you to contact us or call 866-631-3470 to learn how our integrated services leverage economies of scale while providing you with a broader, more informed and comprehensive perspective and insight into your operations, accounting and taxation challenges.



Contact an Estate Planning, Business Law Or Tax Attorney Today

To set up a free, no-obligation consultation with one of our knowledgeable San Diego based estate planning, business and tax lawyers, or learn more about our tax preparation, accounting and business advisory services call us at 866-631-3470 or contact us.