Tax Law May Send Factories and Jobs Abroad, Critics Say

Tax Law May Send Factories and Jobs Abroad, Critics Say
Under the new law, income made by American companies’ overseas subsidiaries will face United States taxes
that are half the rate applied to their domestic income, 10.5 percent compared with the new top corporate rate of 21 percent.
Under the new rules, beyond the lower rate, companies will not have to pay United States taxes on the money they earn
from plants or equipment located abroad, if those earnings amount to 10 percent or less of the total investment.
Before the tax overhaul, companies had to pay the standard corporate tax on the money they earned abroad, with a top rate of 35 percent,
but only when they brought that income back into the United States.
“We are basically saying that if you earn in the U. S., you pay X, and if you earn abroad, you pay X divided by two.”
What could be more dangerous for American workers, economists said, is
that the bill ends up creating a tax break for manufacturers with foreign operations.
“The tax cut will mean more companies moving to America, staying in America and hiring American workers right here.”
The bill that Mr. Trump signed, however, could actually make it attractive for companies to put more assembly lines on foreign soil.