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October 2, 2017

MSCI On Republican Leaders’ Tax Plan: A Positive First Step

Last week, the White House and Republican leaders on Capitol Hill released a more detailed framework for comprehensive federal tax reform. The outline would:

  • Reduce the corporate income tax rate from 35 percent to 20 percent and eliminate the corporate alternative minimum tax;
  • Set a new top rate of 25 percent for pass-through business income;
  • Eliminate Section 199 manufacturing deduction and the estate tax;
  • Move the United States to a territorial tax system;
  • Allow full expensing of capital investments made after September 27, 2017 for at least 5 years;
  • Partially limit net interest deduction for C corporations;
  • Consolidate the current seven personal income tax brackets into three (12 percent, 25 percent, and 35 percent) and index the brackets to inflation;
  • Nearly double the personal income tax deduction to $12,000 for single filers and $24,000 for married filers;
  • Eliminate several personal and corporate income tax deductions. (The outline did not reveal which deductions should be phased out, however.)

The full proposal can be found here, and a one-page overview from the U.S. House Ways and Means Committee can be found here.

The Metals Service Center Institute (MSCI) released a statement from its President and CEO M. Robert Weidner on Thursday. Weidner said, “The tax reform framework offered by congressional leaders and the president is a positive first step to bring greater prosperity to service centers and to all Americans.” Weidner argued, “The proposed lower corporate tax rate will ensure that our members are finally competitive with their global trading partners. And while we believe that pass through rates must be equal to the corporate rate, this proposal indicates that policymakers understand the importance of small and medium sized businesses to job creation.”

MSCI pledges to work with its tax coalition partners to demonstrate to lawmakers the importance of ensuring:

  • Corporate and pass-through rate parity;
  • Interest deductions;
  • Last in-first out (LIFO) retention; and
  • Permanent and immediate expensing for capital investments.

To that end, MSCI joined a letter organized by the U.S. Chamber of Commerce “to adopt a budget resolution with reconciliation instructions that will permit tax reform to move forward without the threat of a filibuster.” Click here to read the full letter.