A quick fix to help the construction industry make more money
4/20/2016 | Construction Blog
People working in the construction industry, like any other business enterprise, are in it to make money. While some enjoy their work and get “payment” in the form of loving what they do, we don’t need to take a poll to know that participants in the construction industry would all be agreeable to making more money.
The numbers suggest that the construction economy is recovering since the crash in 2008. It remains a matter of debate among the experts as to the rate of the recovery and whether it has recovered completely. If one were to rely on circumstantial evidence though, it would seem safe to assume that the recovery has not proceeded at a rate that anyone prefers. This might be due to one simple fact: taxes.
A recent Treasury Department report ranks the construction industry as having the highest effective tax rate of any industry. The construction industry pays an effective corporate tax rate of 30.3%. The majority of other corporations pay closer to a 23% rate. This results from various tax breaks provided to other industries to lower the statutory corporate tax rate of 35%. This rate discrepancy becomes even more pronounced when one considers that many construction companies are S-Corporations that file their “corporate returns” as part of their personal tax returns.
A simple fix to speed up the economic recovery in the construction industry and generate more money for those working in it would be to change the tax structure for construction companies to allow them to pay less taxes. This could be done in a number of ways, including lowering the statutory corporate tax rate or offering construction companies similar tax breaks to those other industries receive. There are countless ways for Congress to address it. So next time you talk with a legislator or candidate, tell them to look at making the tax code more fair for construction companies. It will speed up the recovery and generate more revenue in the long run.