Under my tax proposal, companies could bring home this $2.6 trillion pie, invest this money in new factories and businesses, and the U.S. Treasury would reap a $360 billion bonus. This should cover the costs of the manufacturing tax of zero and then some.
Manufacturing Tax of Zero
I propose a 28 percent corporate tax rate, with a zero percent tax rate for manufacturing companies, and a onetime amnesty rate to repatriate earnings held offshore at a 14 percent rate.
Overall, the corporate taxes now contribute only about 10 percent of total federal revenues. Under my proposal, corporations will pay more money to the federal treasury and thus create more jobs. On total federal tax revenues of $3 trillion a year, corporations now contribute only about $300 billion.
Individual citizens pay the bulk of federal tax revenues. Manufacturing is the primary area where the United States has lost jobs over the past 20 years. Manufacturing also creates more jobs than other businesses because it creates jobs with suppliers and service providers as well as necessary buildings and equipment.
If we lower the corporate tax rate to 28 percent and eliminate all loopholes (no investment tax credits, no oil depletion allowance, etc.,) we can institute a tax on manufacturers of zero percent. This would be based on the amount of U.S. content in the products manufactured. This zero tax rate would apply only to products made with 100 percent U.S. content. For example, if a manufacturer assembles a product in the United States with 50 percent U.S. content, the manufacturer would pay an income tax of 50 percent of the 28 percent rate, or 14 percent. However, if the manufacturer has 100 percent U.S. content, its tax rate would be zero.
This new tax rate would serve to incentivize manufacturers to make their products in the United States. It would help to create millions of American jobs by bringing manufacturing back to New York, Illinois, California, Ohio, Michigan and every other state.
Individual Income Taxes
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