A $4000 Pay Raise??
As we closely follow the new tax proposals coming out of the White House, the House of Representatives and the Senate, it’s important to analyze the effects of those proposals. One of the effects the White House announced Wednesday evening was that the proposal they are pushing would effectively raise the U.S. Household Income by $4000 over the next 8 years.
How you ask?
By bringing U.S. profits that are held off-shore back into the U.S.
I have been giving a Keynote lecture across the country explaining all the different proposals we are seeing, and the one that has the most impact is the shift that they are recommending from a “Worldwide Tax System” to a “Territorial Tax System”. It’s not necessary to get caught up in the details of each – the bottom line to them is that American companies would be allowed to bring their profits back into the U.S. and NOT pay tax on those profits when they bring them back into the U.S. Take Apple for example – it has been said that they are holding 93% of their cash overseas!!! Imagine the investment in the U.S. and the impact to our economy if they bring that back and invest!
The White House’s Council of Economic Advisors Chairman stated:
"In 2016, U.S. firms kept 71% of foreign-earned profits abroad. What would happen if they didn't do that? A simple back-of-the envelope calculation suggests U.S. workers in 2016 would have received a raise of nearly 1%. What if these firms didn't do that for the next 8 years? The median U.S. household would get a $4,000 real income raise."
Now some of this is what it seems, just rhetoric. But regardless, it is important for all of us to contemplate the proposed effects this legislation might have on our families, businesses, and the American Economy.
If you would like more information on the proposals we are seeing or would like to book us for a Keynote Speech to present the proposed tax plans to an Association to which you belong, please contact us at 618-997-3436 or check us out on the web at www.taxplanning.com. We already have speeches lined up in January, February and April, so don’t delay as our schedules are filling up!