What’s To Gain With Tax Reform? 6.5 Million New Jobs And $12 Trillion In New Growth
With Politico reporting Republicans in Congress may soon use the federal budget process to advance tax reform legislation, the National Association of Manufacturers issued a report last week that argued comprehensive tax reform would increase economic growth by more than $12 trillion, increase investment by more than $3.3 trillion and add more than 6.5 million jobs to the U.S. economy over a decade. The study argues tax reform must:
- Set a maximum corporate tax rate of 25 percent;
- Outline a globally competitive international tax system;
- Provide full expensing for capital equipment and enhanced and permanent research and development incentives; and
- Include parallel changes for non-corporate pass-through businesses.
As part of the Coalition for Fair Effective Tax Rates, MSCI last week sent letters to President Barack Obama and leaders in Congress asking them to make comprehensive, revenue-neutral tax reform a priority.
The letters said, “The federal tax code is broken. Fixing it will require a comprehensive approach. The tax system needs to be simplified and the tax base should be broadened. In addition and in particular, tax rates should be lowered for corporations and for businesses that pay taxes via the individual rate system.” The letters also argued, “The current code is not only complicated, it’s also unfair. Large disparities exist between industries in the amount of taxes businesses pay – i.e. their effective tax rates. That’s why our Coalition strongly believes that tax reform should be viewed through the lens of effective tax rates. Successful reform should be measured by our ability to reduce these discrepancies and create a more level playing field for all businesses of all sizes across all sectors.”
The letters were sent to the president, Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Paul Ryan. MSCI will post the letters on its website this week, but they are also currently available on the Coalition’s website.