Be careful what you wish for when it comes to tax reform. Industry groups are concerned that a combination of a lower corporate tax rate and the closing of current exemptions and loopholes could actually result in a tax increase for many businesses.
The American Iron and Steel Institute, for example, sent a letter to the leaders of the House Ways & Means Committee supporting efforts to reduce corporate tax rates and simplify the tax code. But AISI President and CEO Thomas J. Gibson warned that "simply eliminating all or most credits and deductions to pay for a corporate rate reduction" could work against goals to increase U.S. competitiveness and grow the economy and jobs.
"Some analyses estimate that taking such actions will result in a $48 billion tax increase on the manufacturing sector, while the retail and financial services sectors will each receive approximately a $20 billion decrease in their tax liability," Gibson wrote.
AISI urged the committee to look at effective tax rates, not just the statutory corporate tax rate, as it proceeds with tax reform efforts.