President Trump’s election was about making the United States great. Part of Trump’s policies was to spend $1 trillion on infrastructure through different policies through tax policies.
This presentation looks at infrastructure in terms of where President Trump sits in terms of policies as well as how corporation are viewing tax reforms. Many corporation already look at United States based corporation like cost centers as such any sort of tax reforms will take time to work through the system.
2. Paul Young - Bio
• CPA, CGA (1996)
• Financial Solutions (FOPM/FPM)
• SME – Risk Management
• SME – Close, Consolidate and
Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Advance Technology and Market
Entry
• SME – Supply Chain Management
• SME – Business Strategy and
Restructuring
Contact information:
Paul_Young_CGA@Hotmail.com
3. Overview
• President Trump’s election was about making the United States great. Part of
Trump’s policies was to spend $1 trillion on infrastructure through different policies
through tax policies.
• This presentation looks at infrastructure in terms of where President Trump sits in
terms of policies as well as how corporation are viewing tax reforms. Many
corporation already look at United States based corporation like cost centers as such
any sort of tax reforms will take time to work through the system.
4. Trump Big Plan for Infrastructure
• http://mhlnews.com/global-supply-chain/infrastructure-boost-fades-us-economic-growth-forecasts?NL=QMN-01&Issue=QMN-01_20170609_QMN-
01_196&sfvc4enews=42&cl=article_5&utm_rid=CPG03000001519274&utm_campaign=19794&utm_medium=email&elq2=2814d0be447e443c82a8705043d
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President Donald Trump is stepping up the fanfare around his $1
trillion infrastructure proposal, but the plan is fast becoming a non-
factor in forecasts for U.S. economic growth.
The administration is in the midst of an “infrastructure week” of big
ideas spanning air traffic, waterways and roads, attempting to move
forward on campaign promises to create millions of jobs and spur
growth to rates not seen in recent years. The reality is, many
concrete details are still missing on specific policies and programs,
timelines, costs, and the savings or employment they’ll generate.
5. USA – Current Spending Infrastructure
• https://www.cbo.gov/publication/52463
Almost all spending on transportation, drinking water, and wastewater
infrastructure is done by the public sector. Federal, state, and local
governments spent $416 billion on it in 2014. That amount equaled
about 2.4 percent of gross domestic product, a percentage that has been
fairly stable for roughly 30 years. The largest amount of public
infrastructure spending in 2014 went to highways ($165 billion),
followed by water utilities and mass transit and rail.
6. Infrastructure Plans – Shift to State and Local
Government
• https://www.nytimes.com/2017/06/03/us/politics/trump-plans-to-shift-infrastructure-funding-to-cities-states-and-business.html
President Trump will lay out a vision this coming week for
sharply curtailing the federal government’s funding of the
nation’s infrastructure and calling upon states, cities and
corporations to shoulder most of the cost of rebuilding roads,
bridges, railways and waterways.
New York Times – June 3, 2017
7. Trump and Tax Reforms
• https://www.nytimes.com/2017/06/09/us/politics/fact-check-donald-trump-infrastructure.html?_r=0 or http://www.cnbc.com/2017/05/19/goldman-sees-
slimmed-down-trump-tax-plan-with-smaller-cuts-less-bang-for-economy-in-2018.html
Goldman Sachs economists expect Congress to approve a stripped-down
tax plan with much smaller tax breaks for individuals and corporations
than the sweeping reforms proposed by Republicans.
The plan would also have less of a positive punch for the economy than
the economists' previous assumption, with GDP gaining just 0.3
percentage points, rather than 0.4.
CNBC – May 19, 2017
8. Trump and Tax Reforms
• https://www.forbes.com/sites/greatspeculations/2017/06/05/will-pfizer-be-affected-by-trump-administration-tax-reform/#4baa03946bed
The Trump administration’s tax reform is eagerly awaited by the
corporate world, as it proposes to lower the corporate tax rate to 15%. A
lower corporate tax rate would allow companies to potentially increase
investments with freed up cash, and more projects may become
economically viable – as the expectation of greater future profits due to
a lower tax rate will encourage risk taking.
Pfizer
The company is clearly strong in financial management, and has
effectively turned its U.S. operations into a cost center. One way the
company has done so is by developing drugs in the U.S.,
manufacturing them overseas, and then buying them back from its
subsidiaries at high prices.
Forbes – June 5, 2017
How many
companies are like
Pfizer with tax
planning
9. USA and BEPS
Source - https://tax.thomsonreuters.com/blog/beps-action-13-what-u-s-multinationals-need-to-know/
It’s official. The U.S. is now playing ball on BEPS. This week, the U.S.
Treasury Department and IRS finalized a rule that will require U.S.-based
multinational corporations to provide detailed, country-by-country income
tax information to the IRS on an annual basis for each country in which they
do business.
The rule brings to end several months of speculation over whether or not the
U.S. would officially support the global tax avoidance guidelines proposed by
the Organisation for Economic Cooperation and Development (OECD) in its
Base Erosion and Profit Shifting (BEPS) project.
10. CASH Hoarding - Corporation
Source - https://www.spglobal.com/our-insights/US-Corporate-Cash-Reaches-19-Trillion-But-Rising-
Debt-and-Tax-Reform-Pose-Risk.html
Wealth inequality in the U.S. isn't just for individuals; the divide between the
haves and the have-nots continues to widen for American companies too. In fact,
of the roughly 2,000 U.S. nonfinancial corporate borrowers S&P Global Ratings
rates, just 25--or the top 1%--hold more than half of the record $1.9 trillion in
cash and short- and long-term liquid investments as of year-end 2016 (see
Methodology section).
This now $1 trillion hoard is nearly twice the $510 billion they held just five years
ago.
Moreover, while all corporate cash grew a significant 10% last year, from $1.7
trillion at the end of 2015, the imbalance between cash and debt outstanding that
we highlighted last year persists, with total debt rising approximately $350
billion, to $5.8 trillion
11. Cash and Investments
Source - https://www.spglobal.com/our-insights/US-Corporate-Cash-Reaches-19-Trillion-But-Rising-
Debt-and-Tax-Reform-Pose-Risk.html
12. Cash and Investments
Source - https://www.spglobal.com/our-insights/US-Corporate-Cash-Reaches-19-Trillion-But-Rising-
Debt-and-Tax-Reform-Pose-Risk.html