Donald Trump offers to streamline US tax code: Promises cut in corporate tax, paring down of tax brackets

Donald Trump, controversial Republican presidential front-runner, has offered to don the role of a reformer president with his newly announced proposals to simplify the U.S. tax code.

On Monday, Trump unveiled a slew of proposals that included slashing of corporate tax rate, slapping a one-time levy on the overseas earnings of U.S. companies and simplification of procedures in personal income tax filing.

Addressing a news conference at Trump Tower in Manhattan, the Presidential front runner vowed to eliminate all loopholes in tax payment if he becomes president in the November 2016 election, Reuters reported.

“It’s a tax reform that I think will make America strong and great again,” Trump said while promising major tax relief for middle income and other Americans.

Offshore profits

The real estate mogul said he has a solution to solve the vexed problem of taxing the offshore profits of U.S. companies parked abroad. Experts have estimated the offshore profits to be around US$2.3 trillion (AU$3.28 trillion).

Trump’s formula suggests slapping an one-off 10 percent tax on such offshore profits, no matter whether they are repatriated or not. The current tax rate for repatriated profits is at 35 percent.

“Everybody agrees it should come back, Republicans, Democrats,” Trump said. But Trump’s plan on overseas profits tax closely resembles to what has been proposed by President Barack Obama and a few senior senators.

Corporate tax@15 percent

The icing of Trump’s tax cake was the plan to cap the tax rate for all businesses at 15 percent, cutting down the present 35-percent top corporate rate. The real estate mogul also vowed to eliminate the so-called death tax known as the estate tax.

Targeting hedge funds, Trump said he will eliminate the “carried interest” loophole in taxation that allows private equity and hedge fund managers to get away with a lower tax than other people. Trump also promised to simplify voters’ tax returns by reducing the number of tax brackets from seven to four.

Based on Fairness

Trump claimed that his tax reform plan is premised on the principle of fairness. He said taxes and the economy were “my wheelhouse,” implying them to be his area of expertise.

“We have an amazing (tax) code. It will be simple, it will be easy, it will be fair,” Trump said of his plan. However, Trump’s unexpected zoom in opinion polls for the Republican nomination seems to be fading in recent days.

During the news conference, Trump was more than willing to use anti-corporate rhetoric, despite being a billionaire entrepreneur. But his tax plan looked obviously pro-business, reported Reuters .

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