Ford Motor Company is praising US President Donald Trump’s proposed tax reform outline, which would cut the national corporate income tax rate from 35 percent to just 15 percent.
The United States’ current corporate tax rate is among the highest in the world. If Trump’s plan were to be implemented, it would place the US among the bottom twenty countries. Proponents argue that such a reduction would make the United States a more attractive place to invest, spurring the creation of new jobs and the return of jobs from overseas. Opponents say that it will reduce federal revenue drastically, without any clear means to offset those losses, ballooning the deficit.
“We believe this is a positive step toward much-needed U.S. tax reform,” said Ford in a statement. “Nothing has greater potential to spur American job and economic growth than lower and more competitive U.S. tax rates.”
At the same time, automakers are fearful of the news that Trump might pull the US out of the North American Free Trade Agreement (NAFTA), which established a free trade arrangement with Canada and Mexico. The move would likely end up giving Ford a competitive advantage, however, as the automaker currently builds more vehicles in the US than any of its competitors.
In January, the company announced the cancellation of a planned small-car plant in the Mexican state of San Luis Potosi, opting to invest in its American facilities, instead.
(Source: Detroit Free Press)