Republican Tax Cuts Would Lift Some Industries More Than Others<br />“Manufacturing and natural resource extraction already have low effective tax rates under current law,<br />and so there isn’t much room for them to fall further.”<br />The analysis projects that the bill will save financial firms $250 billion on corporate taxes over the<br />next decade, a 35 percent cut from what otherwise would have been a $715 billion tax liability.<br />The study found that real estate firms would see a 16-point reduction in their<br />effective rates next year, and financial firms would see a 12-point reduction.<br />The Penn Wharton economists found that it would reduce the average effective tax rate<br />across industries to 9 percent next year, down from 21 percent under current law.<br />The cuts would boost some industries far more than others, in part<br />because some sectors, like financial firms, pay higher effective tax rates than others, like manufacturing.<br />Financial firms start with a higher effective rate, and in the first few years would see a larger rate cut.<br />The findings come from economists at the Penn Wharton Budget Model at the University of Pennsylvania, who projected<br />how the final tax bill would change the average effective tax rates of a variety of industries over time.
