When it is time to complete the Reply Post*, you will need to read through your classmate's original thoughts. Find one Original Post* to reply to in at least two paragraphs. For the Reply Post*, you will reply to ONE other student's response to question 1 in the original post about the ethical issues related to the corporate tax rate decrease. Provide details, including any example computations as deemed necessary, to refute your classmate's stance. Reference your resources in your reply post. In refuting your classmate's response, remember to respectfully disagree and offer an alternative.

To preface my response to the first question presented, the current corporate tax rate was decreased from 35% to 21% as a result of the Tax Cuts and Jobs Act passed in 2017 [Tax Policy Center, "How Does the Corporate Income Tax Work?). To most, it would look as if this helped companies to turn more profit and thus bolstered the economy to a pace never before seen, because at the very start of 2020 we had some of the lowest unemployment numbers in American history, and this was a full 3 years after the passage of the Tax Cuts and Jobs Act. However, the nation's debt continues to skyrocket to astronomical amounts. Furthermore, the Tax Cuts and Jobs Act didn't do anything to stem it. Reckless spending leads to devaluation of currency and thus hyperinflation. Lowering the corporate tax rate seemed to put a tiny band aid on a flooded dam.

As previously mentioned with the Tax Cuts and Jobs Act of 2017, organizing as a corporation is slightly more viable than in previous years, as there has been more breathing room given to corporate entities on their taxes, and they can increase operating and profit margins as a result of this. When filing as a C-corporation, the ownership/shareholders would have to consider how permanent and temporary differences will affect their taxable income. There are a lot of different factors that make up temporary differences such as a payment of rental income or payments on loans outstanding. These subsequent payments will cause taxable income increase and thus the amount of tax that the entity is liable to pay. As it would seem to be an ethical standard along the lines of being straightforward with any client, it seems fairly reasonable FPR a company to disclose any book-to-tax difference in its income tax filings.

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However I must disagree with my classmates stance that the corporate tax rate decrease is a positive ... View the full answer