A White House spokeswoman said National Economic Council Director Gary Cohn is aware of the FedEx tax plan, but declined to comment on whether or not the president and his advisers support its proposals. The aide added that the White House is pleased people are engaging and bringing forth their ideas.
Interest Expenses
The plan also calls for a 10 percent minimum tax on offshore passive income -- such as interest, dividends, rents and royalties -- in locales with a tax rate below that threshold. It allows for companies to write off only half of their net interest expenses on future loans -- down from a full write-off now. Ryan’s plan would completely eliminate this deduction, which is valued in debt-fueled industries like private equity. In another change from the House plan, which would allow for full, immediate expensing of companies’ capital investments, the FedEx initiative would allow companies to immediately deduct half that cost.
While he confirmed the authenticity of the plan that Bloomberg News obtained, Brown said it will almost certainly change in the future.
“We’re not saying this is the only way to get there,” Brown said. “It’s just a way to show revenue can get there without border adjustability. We’re going to keep playing with it as we get feedback from companies.”
Smith, who has a long history of fundraising for Republicans and lobbying for business-friendly policies, met with Trump in November after the election. FedEx hasn’t joined the coalition of companies opposing the border-adjusted tax, but Smith did criticize its potential effect on trade because it taxes imported goods.
“This is just very destructive,” to international trade, Smith said on an earnings conference call in December. “It’s not the proper solution.”
This article was provided by Bloomberg News.