The tax bill Republicans passed and President Donald Trump signed last year provided incentive for corporations to send factories and jobs overseas, Ohio Senator Sherrod Brown (D) recently told the president — a fact Trump indicated he did not know.
Sen. Sherrod Brown (D-OH) spoke with Trump Wednesday night about the closure of at least five General Motors plants, including one assembly plant in Lordstown, Ohio, and filled him in on how the GOP tax bill is partly to blame.
“I reached him last night, he said he wanted to help, I said the first thing you could do is you could take away that tax provision in his tax bill that gives a company a 50 percent off coupon on their taxes,” Brown told CNN’s New Day Thursday. “If you’re producing in Lordstown you pay a 21 percent tax rate, if you move to Mexico you pay a 10.5 percent tax rate, and I told the president to get rid of that tax break that encourages jobs to move overseas.”
Trump’s claim that he was unaware of the provisions’ potential effect on American companies and jobs is difficult to believe: at least three analyses indicated as much before the bill was signed, including Trump’s own Congressional Budget Office (CBO).
“By locating more tangible assets abroad, a corporation is able to reduce the amount of foreign income that is categorized as GILTI (Global Intangible Low Taxed Income),” the report stated. “Similarly, by locating fewer tangible assets in the United States, a corporation can increase the amount of U.S. income that can be deducted as FDII (Foreign-Derived Intangible Income). Together, the provisions may increase corporations’ incentive to locate tangible assets abroad.”
Brown himself highlighted this issue during a hearing in November 2017, explaining with the help of a corporate tax expert just how the tax bill encouraged companies to manufacture overseas.
Brown had reportedly reached out to the president earlier in the year when the first phase of layoffs at Lordstown occurred, but nothing was done. Now, with a key 2020 re-election campaign on the horizon and a mountain of bad press, Trump seems intent on saving face with voters in the key purple state of Ohio.
Brown told CNN that Trump subsequently expressed an interest in signing onto his American Jobs, American Cars Act that would eliminate the incentive for corporations to move jobs overseas and provide consumers with a $3,500 price deduction on a purchase or five-year lease of a new, American-made car.