Perhaps it’s not surprising that almost all – 95 percent – of the 680 business execs recently surveyed by KPMG said the U.S.’s current corporate tax system was in need of reform. Slightly more than one-third said the system was seriously flawed and needed a complete overhaul, while 59 percent said it has some flaws and needs some reforms.

The most serious shortcomings: Three-quarters of respondents said the corporate rate is too high, while half said foreign income is not taxed properly. Sixteen percent cited the sheer complexity of the system.

When it comes to reducing the corporate rate, nearly four-fifths of respondents said they would forego some corporate tax incentives in order to gain a lower overall rate. The deductions that would be first to go were accelerated depreciation (68 percent), the manufacturing deduction (66 percent) and the R&D tax credit (52 percent).

Of course, the devil remains in the details. It’s likely that some respondents haven’t had an opportunity to use these credits anyway, so losing them won’t have an impact. Other organizations likely would support the incentives’ elimination only if they were assured that the new tax rate was lowered enough to offset the loss. As Hank Gutman, principal with KPMG’s national tax practice, points out, business execs will ask themselves as they weigh the trade-offs: is my ox getting gored?

“Business tax reform on a revenue neutral basis is a zero sum game,” Gutman notes. Not everyone is going to come out a winner. Still, the execs seem to recognize that “a hard stance on incentives with respect to corporate tax reform will not work,” Gutman said.

When asked the top business tax concern for 2012, 40 percent of respondents listed the current corporate tax rate. Next in line was the taxation of international operations, which came in at 24 percent.

Interestingly, 16 percent of execs with domestic firms identified the taxation of employee benefits and executive compensation as a top tax concern. That typically doesn’t make this list, Gutman notes. It may mean that respondents see these as vulnerable to some sort of tax scheme down the road.

Another finding that caught Gutman’s attention: 40 percent of respondents indicated that government might make up any revenue shortfalls resulting from a drop in the corporate rate by boosting tax rates on the capital income of high-net worth individuals. “It’s interesting the number of people who recognize that this can be an avenue,” toward a revenue-neutral tax overhaul, Gutman notes.

At the same time, respondents didn’t sound overly optimistic that reform would occur any time soon. Just 16 percent predicted reform in 2013; one-fourth said 2014, while 29 percent said it wouldn’t happen until 2015 or later.

That may explain why only 15 percent of respondents said their firms were actively engaged in the tax reform discussion. Two-thirds said their organizations were taking a wait-and-see approach; that the issue of tax reform hadn’t achieved enough footing yet to warrant action.

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