Nightly Business Report reviewed Trump's new corporate tax plan last night which would eliminate any deduction for the cost of imported goods while changing the corporate tax rate to 20%.
They used an example where WalMart imports goods from China for $5 and sells them for $15, with domestic costs of $5.
Currently WalMart pays a 29.1% corporate tax of $1.46 on their $5 profit, the $15 sales revenue minus the $5 domestic costs minus the cost of the imported goods.
Under Trump's new plan WalMart will not be able to deduct the $5 cost of the imported goods, so they would owe a 20% tax, or $3 tax on the $10 of net sales revenue after deducting the domestic costs.
Under Trump's import tax plan WalMart would pay a 66% tax rate ($3 on their $5 profit) because they will not be able to deduct the cost of imported goods. Currently WalMart pays 29.1% tax on their $5 profit.
Trumps' import tax plan would turbocharge the domestic apparel industry which is centered in Los Angeles.
We've run out of other people's Social Security taxes needed to subsidize our low income tax rates.
