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%.
Trump's Corporate tax plan would turbocharge the domestic apparel industry primarily located in Los Angeles.
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.
The Nightly Business Report example was WalMart which 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.
Trump's new corporate tax plan would reduce WalMart's after-tax profits by roughly 50%.
We've run out of other people's Social Security taxes needed to subsidize our low income tax rates.
