What Trump's Tax Plan Means For Canada

The election of Donald Trump combined with Republican control of Congress means that U.S. tax reform has suddenly gone from totally impossible to highly likely. The specifics of that reform are not known but the President-elect has promised personal and corporate tax cuts, in the corporate case specifically aimed at keeping jobs in America and stimulating investment. The corporate tax rate reductions will reduce the motivation for so-called inversion transactions like the one that saw Tim Hortons merge with Burger King as a means of avoiding high rate U.S. taxation on foreign profits of U.S. multinationals.

There is also speculation that the U.S. will offer a temporary tax holiday to encourage repatriation by American multinationals of foreign earnings held outside the country. This may be a precursor to a larger U.S. tax reform initiative to bring the U.S. system in line with most other developed countries' corporate taxation systems that offer an exemption from