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Tax Reform: Corporate Tax Reduction and Its Consequences

The state, being the most important participant in corporate relations, performs the functions of not only a regulator of organizational, legal, and financial relations but also an active independent player in the financial market. The presence of state regulation allows not only to clarify and regulate the functioning of the corporate sector but also to use the capabilities of corporations to strengthen the national economy. The role of the state is to regulate the organization of a corporation, and the legislative acts of states give a definition of the concept of a corporation, determine the types of corporations and the rules for their relationship, and regulate financial relations.

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The given change will further proliferate the rate of corporate formations because it will become more appealing due to tax rates. The corporate tax reduction might decrease the rate of corporate inversions because the latter is a tedious process, which changing a company’s legal location. In addition, repatriation of earnings might decrease because corporations will be less likely to conceal their earned income, but there is no certain determining factor for such a statement. The reform might increase the overall economic competitiveness with other nations due to the fact that corporations will be more incentivized to operate in the U.S.

However, the tax reform will significantly reduce the federal budget, which will inevitably lead to deficits and cuts in funding. It is important to note that certain companies will still find ways to avoid taxes even though the reform reduces the required amount. For example, Amazon did not pay any taxes in 2018 (Shannon). The latter will impact the nation’s support networks for the citizens and increase economic stratification, where the rich become richer, and the poor become poorer. The number of capital investments will increase substantially because companies will have more resources to allocate for their own development.

Work Cited

Shannon, Joel. “Amazon Pays No Federal Income Tax For 2018, Despite Soaring Profits, Report Says.” USA Today. 2019. Web.

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StudyCorgi. (2022, March 19). Tax Reform: Corporate Tax Reduction and Its Consequences. Retrieved from https://studycorgi.com/corporate-tax-reduction/

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StudyCorgi. (2022, March 19). Tax Reform: Corporate Tax Reduction and Its Consequences. https://studycorgi.com/corporate-tax-reduction/

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StudyCorgi. "Tax Reform: Corporate Tax Reduction and Its Consequences." March 19, 2022. https://studycorgi.com/corporate-tax-reduction/.

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StudyCorgi. 2022. "Tax Reform: Corporate Tax Reduction and Its Consequences." March 19, 2022. https://studycorgi.com/corporate-tax-reduction/.

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StudyCorgi. (2022) 'Tax Reform: Corporate Tax Reduction and Its Consequences'. 19 March.

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