Trump's Corporate Tax Plan Wins Plaudits in Germany
U.S. President-elect Donald Trump’s plan to slash corporate taxes could reduce global tax avoidance, according to a study by the Center for European Economic Research, ZEW, that Handelsblatt has obtained.
“Europeans could actually make an exception and applaud the new U.S. president once,” Friedrich Heinemann, the economist who authored the study, told Handelsblatt.
Mr. Trump has proposed slashing the U.S. corporate tax of 36.5 percent, the second-highest rate in the world next to France, by more than half to 15 percent.
Including the taxes levied on companies by U.S. state governments and municipalities, the corporate tax would fall to 21.6 percent overall, just above the average rate in the European Union of 21 percent.
“Trumps plans actually seem like a much overdo adjustment to international standards when it comes to tax burdens,” Mr. Heinemann said.
The president-elect’s tax plan could reduce the incentive for U.S. companies to shift their profits abroad in order to avoid high taxes in the United States, Mr. Heinemann said.
A German government official, who declined to be named, also praised Mr. Trump’s tax plan.
“If Trump implements his tax plans, it would solve half of the problems with base erosion and profit sharing,” the official told Handelsblatt.