ARLINGTON, Va. -- The Tax Reduction and Reform Act (H.R. 3970), sponsored by Rep. Charles Rangel, would be harmful to U.S. businesses and result in job losses, according to a report from the Manufacturers Alliance/MAPI.
Economic Consultant Jeremy Leonard says that the tax increases on non-corporate firms associated with repeal of the Alternative Minimum Tax (AMT) and corporate base broadening would offset reduction in the statutory federal corporate tax rate from 35 to 30.5 percent. The new system would be counter-productive and impose a significant tax increase on manufacturers -- as much as $100 billion over the next 10 years.
Using macroeconomic simulations to measure potential effects of the bill, MAPI projects the loss of 4.9 million jobs and over $300 billion in output over 10 years. Manufacturers would lose $130 billion in output and 446,000 jobs.
"In order to address the tax competitiveness problems of manufacturers, their effective tax rate needs to decline, not increase," Leonard said. "The best way to accomplish this is to focus less on base broadening and more on reducing statutory rates further than anticipated in current legislative proposals."
For more information, visit www.mapi.net