3 Items That Could Get Less Expensive If Trump Lowers Corporate Taxes
Written by
Josephine Nesbit
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Jenna Klaverweiden
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President-elect Donald Trump isn’t in office yet, but his proposed tax plans are causing a stir.
During a speech at the Economic Club of New York in September 2024, Trump said he supports lowering the corporate tax rate from 21% to 15% “solely for companies that make their product in America” in an effort to “further support the revival of American manufacturing.”
While the intention is to increase domestic production and companies’ profits and, in turn, allow them to pass any savings on to consumers in the form of lower prices, some argue that it would benefit only top earners and executives and would fail to trickle down to lower- and middle-income households.
Here are details on Trump’s proposal to lower corporate taxes and some items that could get less expensive if he were to do so.
Also see what an elimination of income taxes would mean for the economy and your wallet.
Can Trump Lower Corporate Taxes?
According to the Cato Institute, Trump requested a cut to corporate taxes in 2017 when Republicans passed the Tax Cuts and Jobs Act, but Congress lowered the federal rate to only 21% from 35%.
“Though many provisions of the Tax Cut and Jobs Act of 2017 (TCJA), from Trump’s first administration, will expire at the end of 2025, the reduction in corporate taxes from 35% to 21% was made permanent, so corporate taxes will not change unless Congress passes new legislation on corporate taxes,” wrote Thomas J. Cryan, tax expert, attorney and author of the new book “Disrupting Taxes,” in an email.
What Items Could Get Less Expensive?
If corporate taxes are reduced only for companies that produce in the U.S., Cryan noted that Congress might attempt to increase domestic production in a number of ways.
“One avenue is to bring back Section 199 — which was repealed with the TCJA — which permitted companies to deduct a percentage of qualified production activity income; difficult water to navigate effectively, though depending on what qualifies for deduction, software and technology industries might benefit,” Cryan explained.
Michael Bernard, chief tax officer at Vertex Inc., explained that the proposal has the potential to lower costs of a few key items, including gas, food and durable products.
He explained that the proposal could lower costs in several key sectors, with energy being the most notable example, provided that external energy production and market productions remain stable.
“A more favorable stance on domestic energy production, including fracking and offshore drilling, may reduce gasoline prices, which in turn could lower transportation costs,” Bernard said. “This may have a ripple effect, potentially making goods, such as food and durable products, more affordable due to reduced shipping expenses.”
However, Bernard also pointed out that some sectors may not see immediate price reductions. For example, services are unlikely to become cheaper due to labor shortages, and housing costs are expected to remain high thanks to underbuilding and limited inventory, he added.
“While reduced tax rates can strengthen domestic supply chains and encourage manufacturing within the U.S., broader economic factors such as inflation and labor availability will play significant roles in determining whether consumers experience noticeable price drops,” Bernard said.
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