What do senior finance professionals hope to see in a comprehensive tax reform package from the Trump administration? A majority favor lowering the corporate tax rate, capital gains tax, and tax on foreign income while increasing the carbon emissions tax, according to a recent survey conducted by the Institute of Management Accountants (IMA).
In addition, most respondents believe Congress should stop increasing the national debt and should get rid of most individual tax deductions.
While the Trump administration and the Republican-led Congress have been focused for months on repealing and/or replacing the Affordable Care Act (ACA), they now have their sights set on making large-scale changes to the federal tax code.
“The result may be the most important tax bill in more than 30 years,” said Kip Krumwiede, PhD, CMA, CPA, director of research for the IMA.
In fact, the White House and congressional leaders are expected to release a unified tax reform framework at some point today, according to published reports.
So, what do senior finance professionals think of the proposed tax changes being considered? Two-thirds of the 94 who were polled by the IMA would like to see the corporate tax rate cut from 35 percent to 15 percent, as President Trump has proposed. And more than two-thirds of respondents would like the capital gains tax to be lowered from 23.8 percent to 20 percent (eliminating the 3.8 percent tax on net investment income under the ACA).
In addition, 47 percent of all respondents favor an environmental tax on carbon emissions, which would encourage businesses to produce less carbon dioxide and other greenhouse gases.
Other key survey results include:
• More than 40 percent of senior finance professionals favor lowering or discontinuing US tax on foreign income of multinational corporations. Two-thirds prefer taxing foreign income in the year it’s earned rather than when the money is brought back to the United States.
• More than 80 percent said it is “extremely important” or “very important” to stop increasing the national debt.
• When asked about personal income taxes, more than two-thirds of respondents said they support reducing the number of individual tax brackets from seven to three (10 percent, 25 percent, and 35 percent).
• Sixty-nine percent favor doubling the standard deduction for individuals.
• Forty-two percent favor eliminating all individual tax deductions except mortgage interest and charitable giving, even though more than half of all respondents said that would impact them negatively.
Respondents’ organizations have annual revenue ranging from less than $1 million (10 percent) to more than $10 billion (17 percent), with an average of approximately $3 billion and a median of $11 million to $100 million.
About Jason Bramwell
Jason Bramwell is a staff writer and editor for AccountingWEB. He has nearly 20 years of experience in print and online media as a journalist and editor.