Germany is apparently worried about the passage of the new tax reform bill. They believe it will cause jobs to move from Europe to the United States. Here’s the thing. They should be worried. After all, that was part of the reason Trump did it! Lowering the corporate tax in America will make America more competitive globally.
Handelsblatt News reports:
Germans fear huge loss of jobs from US tax reform
While Americans are anxiously awaiting full details of the tax bill now being finalized in Congress, German economists are warning that the changes sought by President Donald Trump mean that significant amounts of new investment and jobs will shift from Europe to the United States.
“The tax competition will have a new dimension,” said Christoph Spengel, chairman of the corporate tax department at the University of Mannheim. Mr. Spengel, who is also a research associate at the Center for European Economic Research, and a group of tax experts at the university have done a detailed comparison of the two countries’ tax systems and published a report under the heading, “Germany loses out in US tax reform.”
Clemens Fuest, who heads the Ifo economic think tank, also said he believed German business would suffer. “Investments and jobs will migrate to the US,” he said.
Sorry, Germany. That was the whole idea!