White House economic adviser Gary Cohn suggested that the U.S. must cut its corporate tax rate to no higher than 23% to remain competitive with other developed countries. What are the chances that the rate will drop to 23%, and how will companies react if it does not, and only declines to 28%? As the administration has indicated that tax reform is a top priority, companies should ensure they are planning now for the potential changes.
Cohn highlighted the importance of getting the current 35 percent U.S. corporate rate more in line with the average rate among countries in the Organisation for Economic Co-operation and Development, which is about 23 percent. A White House tax outline released in April had set the 15 percent goal for corporations and pass-through businesses.