Trump’s Tax Cuts Have Loopholes That Promote Tax Evasion
Trump’s largest legislative achievement from his first term is the tax overhaul that he signed into law. The overhaul is in part leading to a spike in the budget deficit, which has increased by 50% under his watch. Some expect the deficit to exceed $1 trillion by 2020.
As soon as Trump started his term, lobbyists focused on earning tax breaks from the Treasury department. Corporations were focused on being able to continue to claim large portions of their profits as being made offshore and thus falling under the tax jurisdiction of typically low-tax countries. Companies that lobbied the government included, Coca-Cola, Bank of America and General Electric.
The main goal of this tax overhaul was to bring more jobs back into the country and to put a stop to the shifting of profits overseas. The bill was rushed through congress through a rule that prevented Democrats from filibustering the deal and through a vote that only required a simple majority. However, the rule is only applicable if the bill has a cost that is $1.5 trillion or less.
The bill has a cost of $5.5 trillion through tax cuts. However, the $1.5 trillion threshold was reached by implementing two new taxes, BEAT and GILTI, aimed at taxing profits that were made overseas. However, these taxes were filled with loopholes allowing corporations to continue avoiding taxes.