WASHINGTON (Reuters) - Business executives in a survey released this week named three corporate tax breaks they would be willing to live without in return for a reduction in the U.S. corporate income tax rate.
The three were accelerated depreciation, the domestic production deduction and the research and development credit, the poll of 680 executives found. It was conducted from July to September by Big Four accounting and audit firm KPMG LLP.
The survey comes as Congress and President Barack Obama edge toward overhauling the tax code for the first time in 26 years, with all the controversy and conflict such a project brings.
Tax reform has widespread support. Most of the executives polled said the corporate tax code has flaws and needs reform.
But tax reform means different things to different people. Some want a fairer code, some want a simpler one, some want lower rates, some want all of the above. Everyone seems to want tax reform, in some way, to help reduce the federal deficit.
The survey respondents cited complexity as the top flaw in the tax code.
Corporate tax breaks annually cost the Treasury about $100 billion. The U.S. budget deficit is $1.1 trillion. So ending all corporate tax breaks would cut the deficit, but not by much.
The code’s big loopholes help average people. For instance, the mortgage interest deduction alone costs $100 billion a year.
The three identified by the executives in the survey deprived the Treasury of $46 billion in 2012. Accelerated depreciation lets companies write off new equipment more quickly than usual, which reduces their tax bills. The domestic production deduction lowers the taxes of companies with U.S. manufacturing. The R&D credit helps companies doing research.
Corporations spend heavily on lobbyists to protect tax breaks central to their businesses. The Obama administration wants to cut a major tax deduction now used by oil and gas companies. The president has also proposed that companies with major international components pay a minimum tax on their foreign earnings.
Reporting by Patrick Temple-West; Editing by Kevin Drawbaugh and Prudence Crowther