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