By Pascalis Raimondos Professor of Economics, Head of School, Queensland University of Technology &
Sara L. McGaughey Professor of International Business, Griffith University
President Donald Trump has proposed cutting the US corporate tax rate from 35% to 15% and ending the practice of taxing the foreign income of US businesses. Trump may be hoping that such a massive corporate tax cut will result in new investment. Indeed, historical data suggests companies will respond by shifting profits to where the tax is low.
This profit shifting will hurt investment in Australia, as companies move their profits to America rather than reinvesting in Australia. If the tax cut goes ahead, Australia and other countries will have to respond by either cutting taxes as well, or totally reforming the way we tax corporate income.
Alternative ways of taxing corporate income exist. The US Republican Party, for example, recently proposed a “destination-based cash flow tax”. Under this system, companies would be
Skip to content
News and other stories about real people, places, and events in Mount Gravatt and nearby suburbs.