The Germans are reporting what our own MSM won’t: Trump’s tax reform is about to have a huge impact on our economy in the way of jobs and investments. German economists are warning that they are about to lose jobs and investments to America due to Trump’s tax bill success. #winning
It’s been a mere days since the historic Republican tax bill passed in Congress and yet already we are hearing reports of companies reinvesting the money saved into capital, employees and increasing dividends. AT&T announced immediately that they would be using the money to give $1000 bonuses to some 200,000 employees! The CEO, Randall Stephenson said “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”
Comcast also plans to give $1000 bonuses to about 100,000 employees and pledged to invest at least $50 billion in the next five years in new ventures. Wells Fargo and Fifth Third Bancorp both announced plans to raise their hourly minimum wage for their employees.
Tell me again, MSM, how this is all bad for America?
Dropping the corporate tax rate from 35% to a competitive 21% is certainly encouraging businesses to spend! The rate puts America in a much better position to attract companies and investments, and even if our own media wants to downplay it, other countries are not.
German economists are warning that the tax overhaul bill that now awaits the signature of President Donald Trump will mean that “significant amounts of new investment and jobs will shift from Europe to the United States,” according to the German business news publication Handelsblatt.
The United States has had a much higher tax rate for businesses than Germany and most of Europe. Under the tax reform bill, the corporate rate in the U.S. will fall to 21 percent, lower than the estimated 28.2 percent effective rate in Germany and close to the European average of 20.9 percent.
Handelsblatt reports:“The tax competition will have a new dimension,” said Christoph Spengel, chairman of the corporate tax department at the University of Mannheim. Mr. Spengel, who is also a research associate at the Center for European Economic Research, and a group of tax experts at the university have done a detailed comparison of the two countries’ tax systems and published a report under the heading, “Germany loses out in US tax reform.”
Clemens Fuest, who heads the Ifo economic think tank, also said he believed German business would suffer. “Investments and jobs will migrate to the US,” he said.
The potential capital influx could be as high as $42.29 billion, or 39 billion euros, according to Handlesblatt.
Gavin Ekins, a research economist at the Tax Foundation in Washington, argued that it is not only the tax rate that will make the US more attractive. He told Handelsblatt Global that in figuring out their “service cost,” a metric that measures the cost of capital, companies also have to consider local labor costs, regulatory burdens, and things like energy prices and the cost of land.The US has the advantage in almost every category, he noted, but until now firms were deterred by the high corporate tax.
“Now you get a windfall for having capital in the US, so that causes investors to invest,” Mr. Ekins says. The change in the capital investment rules gives US firms “a tremendous advantage,” he said. “It’s a pro-capital formation tax bill and this is why other countries are so wary about what the investment landscape will look like.”
Using direct investment figures from the period 2008-2012, the German specialists calculated that the value of German foreign direct investment in the US could rise by €39 billion with the tax reform. It said US direct investment in Germany would also rise, but by a much smaller amount: €6.3 billion.
Handlesblatt’s reporting highlights the shallowness of much of the U.S. media’s coverage of the tax bill, which has focused on claims that U.S. corporations are likely to use much of the windfall from tax cuts to pay dividends and buy back shares.
It has amazed me how the MSM can ignore simple facts about the tax bill and continue to try to convince us that it is somehow going to harm our economy.
Nancy Pelosi said the tax bill would be the “worst bill ever passed” (has she forgotten about the Fugitive Slave Act of 1850?) and the tax bill was “armageddon!” Chuck Schumer says the GOP will “rue the day” they passed the tax bill. I think it’s more likely he will rue the day he voted against it.
America is ready to retake her place in the world. Burdensome tax burdens were holding businesses back and discouraging new ones from coming to the U.S. But that is in the past and President Trump is certainly making good on his promise to “Make America Great Again!”