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NAW Promotes Formation of the Coalition for Fair Effective Tax Rates

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From Dirk Van Dongen, NAW President, and
Jade West, NAW Senior President-Government Relations 

There have been quite a few news stories recently about the very low effective U.S. tax rates paid by a number of large multi-national corporations.  While many of these U.S. corporations pay effective tax rates in the single digits, wholesaler-distributors are among the highest effective tax rate payers in the U.S. – NAW members pay an average effective rate of 31% with some paying more than the statutory corporate rate of 35%.

Pass-through corporations – especially in our industry – also pay a disproportionately high effective tax rate since they pay under the individual tax code with its new top rate of 39.6% (before adding the ObamaCare taxes). 

With increasing discussion in Washington of comprehensive tax reform, and talk of reducing the corporate tax rate to 25%, it is critical that policy-makers measure tax reform on the basis of effective rates – what businesses actually pay.  Only by addressing effective tax rates can tax reform truly level the playing field and correct the current system in which low rate payers shift the tax burden to industries and companies – like ours – which pay close to or more than the statutory rate. 

NAW has just joined with a group of association colleagues to form a new tax coalition, the Coalition for Fair Effective Tax Rates, to ensure that any tax reform proposals are viewed through the lens of effective – not marginal or statutory – tax rates. NAHAD Is a member association of NAW.