President Donald Trump’s assurance to reduce taxes for the middle class, and the money saved by individuals benefiting from those tax cuts, could be funneled directly back into American businesses.
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“Anything that contributes to the economy, and the growth of the economy, is a good thing,” Carnival Corp. CEO Arnold Donald told FOX Business’ Liz Claman on ‘Countdown to the Closing Bell.’ “And I think a simpler corporate tax broadly is probably a good thing for America.”
The tax reform plan unveiled on Wednesday also included lowering the corporate tax rate, which is currently 35% -- 10 points higher than the global average of 25%. Trump promised to lower the tax rate to “no higher” than 20% for businesses, which he has said could entice American companies who have taken their operations overseas due to the high corporate rate, to return home.
“We have surrendered our competitive edge to other countries,” he said during a speech in Indianapolis on Wednesday. “But we aren’t surrendering anymore.”
The Trump administration and Congress have been working fervently to pass some type of comprehensive tax reform legislation, after failing three times to deliver on a seven-year promise to repeal and replace the Affordable Care Act.
Though Carnival Corp. (NYSE:CCL) is domiciled in Panama -- only 7% of the company’s sailings are in U.S. ports -- the cruise industry giant still pays hundreds of millions of dollars in additional fees, including harbor and port taxes, Donald said. Panama’s corporate tax rate is currently 20%.
“We pay a lot outside of income tax,” he said. “And in addition, we’ll pay tens of millions in income tax.”