Will Trump’s Tax Cuts Kill Israel’s Start-Up Scene?
Image by Getty Images
By Aiden Pink April 27, 2017
President Trump’s proposed tax plan may decimate Israel’s vaunted high-tech industry, business analysts have warned.
Trump aims to lower the top corporate marginal tax rate from 35% to 15% in a bid to grow international investment and keep companies from outsourcing. This would likely spur foreign entrepreneurs to move their businesses to the U.S., or choose to incorporate new ones in America in the first place. And Israelis would be no exception.
“At a low tax rate of 15% in the U.S. there is a strong likelihood we will see Israeli tech companies, whose main markets are in the U.S., incorporating in the U.S.,” Sharon Shulman, the tax managing partner of EY Israel, told the Times of Israel. “This represents without any doubt a significant risk to the Israeli economy in the long term.”
Companies already based in Israel may not relocate right away, but for start-ups, the pull of America will be strong. “And that is exactly the intention of Trump,” Shulman explained.
Israel’s current top corporate tax rate is 25%, although a proposed new tax plan would cut that rate in half.
Contact Aiden Pink at [email protected] or on Twitter at @aidenpink.
This is a moment of great uncertainty. Here’s what you can do about it.
We hope you appreciated this article. Before you go, we’d like to ask you to please support the Forward’s independent Jewish news this Passover.
This is a moment of great uncertainty for the news media, for the Jewish people, and for our sacred democracy. It is a time of confusion and declining trust in public institutions. An era in which we need humans to report facts, conduct investigations that hold power to account, tell stories that matter and share honest discourse on all that divides us.
With no paywall or subscriptions, the Forward is entirely supported by readers like you. Every dollar you give this Passover is invested in the future of the Forward — and telling the American Jewish story fully and fairly.
The Forward doesn’t rely on funding from institutions like governments or your local Jewish federation. There are thousands of readers like you who give us $18 or $36 or $100 each month or year.
Support our mission to tell the Jewish story fully and fairly.
