Trump announced, April 26, the biggest cut in company tax rate in US history — from 35 percent to 15 percent — in a move the multi-billionaire president hopes will boost the economy and US businesses.
However, the move has been heavily criticized within the EU — which is attempting to broker the Transatlantic Trade and Investment Partnership (TTIP) trade deal with the US, which relies on a level playing field.
Slamming Trump's tax plan, Socialists and Democrats (S&D) MEP Paul Tang said: "This is a return to a beggar-thy-neighbor-policy of the thirties. Competitive devaluation of exchange rates could start a further race-to-the bottom in corporate tax rates. To the sole benefit of multinational enterprises (MNEs), smaller firms and workers, both in and outside America, will be paying the price, directly or indirectly.
"The European response must be responsible, socially and politically. We must stop the race-to-the-bottom with Europe and with the rest of the world, and at the same time set global standards for fair corporate taxation," Tang said.
"We strongly deplore such a move in the current context of otherwise international cooperation in the field of taxation. Different revelations have shed light on the lack of efficiency and adequacy of our tax systems and there have been clear political answers from both the G20 and the Organisation for Economic Co-operation and Development (OECD)," said the Socialists and Democrats (S&D) Group spokesperson on economic and monetary affairs in the EU Parliament, Pervenche Berès.
Twitter: "The #Trump tax project: a reform by the rich for the rich in disregard of international commitments #G20"
"The announced proposal risks to undermine the ongoing reform efforts, in which the EU plays a leading role. We will keep pushing for deep and fair tax reforms and we will not accept any foreign or internal threats to the financial stability of the EU," said Beres.
"A fairer tax system is not only in the interest of the EU, rather this is a global issue which sees demands of radical change from citizens from all over the world."
The row comes the day after the EU Parliament voted, April 28, to clamp down on aggressive tax planning methods being used by big — and largely US — businesses to avoid paying tax in the EU.
"These arrangements are frequently used by the largest companies with the sole purpose of reducing corporate taxation. We have seen it in both the Apple case and in the McDonald's case. It is about time these corporations paid their fair share of taxes," said S&D rapporteur Olle Ludvigsson.