Key Points for Financial Executives
FEI President and CEO Marie N. Hollein released the following statement in response to the Administration's tax reform proposal:
Corporate tax reform can ensure long-term job creation in this country, but to be effective, our tax policy must be globally competitive. While lowering the corporate tax rate to 28 percent is a good solid step towards making the U.S. more competitive globally, examining the international tax landscape makes clear that an unspecified new minimum tax on overseas earnings and the absence of a territorial tax system will continue to place the U.S. at a considerable disadvantage to other nations.
While corporate tax reform is important, it should not be tackled in isolation. After all, privately-held and family-owned businesses are drivers of innovation and job creation as well, and it is essential that these firms be included in any comprehensive tax package. Under today’s proposal, many of these businesses would see their taxes go up as tax preferences they currently enjoy are eliminated and their individual tax rates remain well above 28 percent and are set to increase still further.
Additional points of interest to financial executives and others can be found in an FEI Summary entitled Treasury Department Releases Corporate Tax Reform Package, Proposes 28 Percent Corporate Rate
. Included among the points noted in the FEI summary, authored by Karen Lapsevic, Director, Government Affairs, in FEI's Washington DC office, are that the Framework proposed by the Administration would:
- Eliminate “last in first out” (LIFO) method of accounting
- Expand, simplify, and make permanent the R&D tax credit
- Require greater disclosure of annual corporate income tax payments
- Lower top effective rate on manufacturing income to 25 percent by reforming the domestic production activities deduction
- Remove tax deductions for moving production overseas and provide new incentives for bringing production back to the United States, including a 20 percent income tax credit for insourcing
- Allow small businesses to expense up to $1 million in investments
Read the full FEI summary for additional details.