Document Type


Publication Date



By lowering the corporate tax rate from 35% to 21%, the 2017 tax legislation brought the U.S. statutory rate into closer alignment with the rates applicable in other Organisation for Economic Co-operation and Development (OECD) nations, thereby decreasing the incentive for businesses to locate their deductions in the United States and their income abroad. Its overhaul of the U.S. international income tax rules simultaneously reduced preexisting incentives for U.S. multinationals to reinvest their foreign earnings abroad and put a floor on the benefits of shifting profits to low-tax jurisdictions. The 2017 legislation also added an unprecedented, troublesome lower rate for the income of certain categories of businesses operated as partnerships or Subchapter S corporations.

In combination, the provisions of the new law have created significant new differences in income tax based on what kind of business is being conducted, where goods and services are bought and sold, to and from whom they are bought, where and how assets are owned, the taxpayer’s size, whether individual workers are employees or independent contractors, and where people live and work. The 2017 law also portends unsustainable increases in deficits and the national debt. The new tax system produced by this legislation provides neither an effective nor stable solution to the nation’s economic and fiscal challenges.


Business Organizations Law | Law | Law and Economics | Taxation-Federal | Tax Law