The United States House of Representatives is planning to introduce a bill to make big cuts in individual and corporate tax rates.
As reported by CNBC, the Republicans are aiming to introduce their bill November 1st, and comes as a pending vote on the budget would allow them to pass the tax cut bill with just 51 votes in the Senate.
The bill is still contentious, as some Republicans are worried that it will increase the deficit, while others are concerned that it offsets personal income tax cuts by removing state tax deductions, meaning some people in high-tax states could face a higher tax bill.
It is expected that few – if any – Democrats will vote for the bill.
Here in Canada, there has been concern that Canada’s competitive position will be weakened if the U.S. passes tax reform, particularly the large corporate tax cuts.
The U.S. has among the highest corporate tax rates in the world (though few corporations actually pay the full rate), and bringing the rate down will erode Canada’s tax advantage.
Additionally, the Trudeau government has been increasing taxes – particularly the carbon tax – and adding more and more regulations as the U.S. reduces red tape.
That’s why many Canadians will be watching the progress of U.S. tax reform very closely, as it could have a big impact on our nation.