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Research and Innovation Village

Abstract

The research showcases the impact of the Tax Cuts and Jobs Act of 2017 on six different industries: agriculture, construction, manufacturing, utilities, finance, and services. Data was obtained from Calcbench, and ratios of income tax to earnings before taxes, assets, and revenue were calculated along with percent changes from 2017 to 2018.It was hypothesized that the Tax Cuts and Jobs Act of 2017 would have a positive impact on these industries and lead to a reduction in taxes. The research demonstrated that change in the corporate tax rate, bonus depreciation, and the NOL carryforward are common aspects of the tax code that benefit each industry. Additionally, the recession of 2008 played a big role in a decline in taxes, as companies suffered profit losses and therefore decreased taxable income. While there was an overall decline in taxes paid across each industry, the construction industry paid the most, followed by manufacturing, finance, services, agriculture, and finally utilities. The income tax to revenue ratio had the least benefit within the construction industry, while the utilities industry received the most favorable treatment. In terms of the income tax to asset ratio, the manufacturing industry fared the worst. Overall, the Tax Cut and Jobs Act benefitted the utilities industry the most and the construction and manufacturing industries the least.

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