Since January 1, 2018, the corporate tax subject in the United States is 21%, following the implementation of the Tax Cuts and Jobs Act. During the current election campaign, Trump has proposed to reduce it to 15% with the goal to stimulate economic growth and increase the competitiveness of U.S. companies.

 This tax subject coincides with the minimum established in the international agreement led by the OECD and the G20, formally known as the Global Minimum Tax agreement . This agreement applies to multinational groups with an annual turnover of at least €750 million and seeks to reduce the incentive for companies to shift profits to lower tax jurisdictions, a internship that has significantly affected the tax instructions of Eurozone countries.

A reduction in corporate taxes would make the U.S. market more attractive to investors by increasing companies' net income, improving their cash flow to pay down debt and lowering their financing costs. It would also increase self-financing capacity and allow for higher shareholder remuneration.

Analyzing the 100 largest U.S. companies by market capitalization, we find that the largest is NVIDIA, with a market value of 3,328,215.6 million euros (M€), while the smallest in this Top 100 is Intercontinental Exchange, with a market capitalization of 83,350.4 M€. subject These companies have an average effective tax rate of 19.5% and their pre-tax profits amount to €1,321,240.8 million.

 In comparison, the 100 largest companies in the Eurozone have an average effective tax rate of 24.4% subject . The business with the largest capitalization is LVMH Moët Hennessy - Louis Vuitton (LVMH), with a value of €301,275.4 million, while the smallest is Nokia, valued at €23,268.2 million. The sum of pre-tax profits for these companies amounts to €539,812.5 million.

To illustrate this difference: LVMH, the largest business in the Eurozone, would rank 25th in the United States in terms of market capitalization. Its effective tax subject is 26.5%, compared to 14.7% for NVIDIA. subject On average, the effective tax rate in the US is 20.08% lower than in the Eurozone (4.9/24.4). If this difference were applied to the aggregate profit of US companies, tax revenues in the United States could increase by 64,740.80 M€ (4.9% x 1,321,240.8), a considerable figure.

If the Trump administration were to reduce the subject tax rate to 15%, which currently seems complicated, US companies, assuming that their pre-tax profits remain constant, would have an additional €59,455.84 M (4.5% x 1,321,240.8) to invest in attracting talent, reinvesting in their operations or improving shareholder remuneration. This could further reduce the relative competitiveness of European companies, an aspect that deserves attention.

It is crucial to anticipate the challenges that may arise from a possible tax cut in the United States. The Eurozone, in particular, should consider response options to these scenarios, taking into account the differences in tax status among its member countries. Moving forward with a coordinated strategy will make it possible to deal more effectively with the competitive dynamics that lie ahead.