ECB sees risk of tax race to the bottom following US reform

Bloomberg

As economists ponder how much additional growth is in store for the US economy following the implementation of President Donald Trump’s wide-reaching tax reform, the European Central Bank says the consequences
for its own jurisdiction “are highly uncertain and complex.”
The tax burden on US corporate income will fall significantly to a level close to that in a number of euro-area economies, the Frankfurt-based institution said in a report. That could overhaul the way companies choose to invest or shift profits.
“The reform risks intensifying tax competition worldwide, entailing a possible erosion of tax bases in EU countries,” the European Central Bank said.
Prior to the reform, the US corporate tax rate stood above the rates of all large euro-area countries, the ECB said.