Truckers Satisfied with Trump Administration’s Tax Cuts
2017 was a solid year for the trucking industry, all things considered. But a recent cut in taxes may make next year even better.
A proposed change to tax rates passed both the U.S. House of Representatives and the Senate in a close vote, marking the most significant legislative victory by the GOP since they got control of both chambers in early 2015.
The plan will slash the corporate tax rate by 14 percent, taking it from 35 percent all the way down to 21 percent. It also overhauls the entire tax bracket for personal income, lowering the top rate from 39.6 percent down to 37 percent.
There were also changes to deductions and exemptions, and the move has been generally accepted as a way to help Americans keep more of their money. This isn’t just true for individuals – it is true for commercial industries as well.
How Will Tax Changes Impact Trucking?
The trucking industry is one where costs are constant. This is true to some degree with all industries, but trucking companies must carefully budget in things like diesel fuel, liability insurance, and the cost of regulatory compliance.
This means keeping more of their money is always something trucking companies aim for. Corporations in the freight industry will see more cash left in their accounts, which is a welcomed change. One of the major changes carriers could see include a boost in investments.
Trucking companies have been trying to save while still keeping shareholders happy. This balancing act got harder as costs rose and money became tighter. More leftover means investments could grow by 4 to 6 percent over the next several years.
Ryan Bourne stated the plan would attract new capital in the U.S. corporate sector, and increase the after-tax return on investment. This would in turn encourage more headquartering in the U.S., which could have other positive effects.
How Could the Extra Funds Be Used?
If carriers are left with more money thanks to the change in tax rates, there are multiple places they could put it.
Carriers could use it to establish regulatory compliance with some of the newest changes in the field. They could also put it towards offering better compensation for their employees as a way of ending the driver shortage, which is currently one of trucking’s biggest problems.
One thing is certain – carriers keeping more of their own money means they can move in 2018 with more confidence.