Small firms back Donald Trump’s tax plan

Small business and manufacturers’ groups praised a proposal by Republican presidential candidate Donald Trump to take the US corporate tax from the highest to one of the lowest among developed nations.

Mr Trump included a call for a 15% corporate rate in a Detroit speech where he outlined other tax and economic reforms.

Business groups have long said their members are hurt because US companies pay the most federal income tax — a 35% rate, though the effective rate is often lower — among the 35 countries in the OECD.

“The fact that he is pushing for a 15% corporate tax rate is definitely a positive,” said Dorothy Coleman, vice-president of tax and domestic economic policy for the National Association of Manufacturers.

“Tax reform is really one of the important goals that we have.”

The Rate Coalition, which lists Boeing, Ford, and Wal-Mart among corporate supporters, said it will not endorse all aspects of Mr Trump’s plan but that the tax proposal is a “huge step in the right direction and we urge other candidates in the race to follow his lead”.

Mr Trump also called for a 10% levy on overseas cash that companies have been unwilling to bring home because of high US taxes.

For small businesses, the proposal was a “home run”, said Juanita Duggan, chief executive of the National Federation of Independent Business.

It would provide the same 15% rate for companies no matter their size, freeing up funds to invest back into family businesses, she said.

The US last adjusted its corporate tax in 1993 when it was pushed up by a percentage point to 35%, said Alan Cole, an economist with the Tax Foundation’s Center for Federal Tax Policy.

Under a 1986 tax bill, the rate was phased down to 34% from 46%.

Countries around the world have been ratcheting down their tax rate steadily to become more competitive, said Mr Cole.

The average corporate tax rate when including state levies and weighted by the size of economy has declined to about 29% from 36% in 2003.

The US corporate tax when including state levies is about 39%, according to the OECD.

The US Chamber of Commerce did not issue a statement on the Trump speech and referred questions to a video that calls for lower rates and a globally competitive system.

The manufacturers association still wants to see more particulars on Mr Trump’s plan, as well as more incentive for capital spending and research and development, said Mr Coleman, adding: “The devil is in the details on this.”