WASHINGTON DC – A report published by the National Foreign Trade Council (NFTC) today showed the negative economic effects of the Financial Accounting Standards Board’s (FASB) Improvements to Income Tax Disclosures on the U.S. economy.
The report indicated that companies may experience cost increases in impacted business functions as high as 62% and averaging 9.9%.
“As the report itself states, the increased costs lead to higher prices, lower demand and lower employment,” said Anne Gordon, Vice President for International Tax Policy at NFTC. “The effects also go beyond that – at a time of economic recovery, these rules may decrease corporate investment which could lead to a decrease in GDP or about $12 billion in 2022 terms. Considering these effects, we’d urge FASB not to move forward with this harmful proposal.”
Other findings in the report include:
- Lower employment and wage growth;
- Reduction of 27,000 full-time equivalent jobs, in year one alone;
- Impacts on economy-wide wage and salary income amounting to the cost-equivalent of the loss of 609,000 average-wage jobs cumulatively by 2040;
- Slower economic growth;
- Decrease in investment; and
- Create competitive disadvantages for companies required to report.
Download the full report here.
About the NFTC
The National Foreign Trade Council (NFTC) is the premier business association advancing trade and tax policies that support access to the global marketplace. Founded in 1914, NFTC promotes an open, rules-based global economy on behalf of a diverse membership of U.S.-based businesses.