In a great example of bipartisanship, President Ronald Reagan and the Democratic Congress worked together in 1986 and reformed America’s tax code. The result of that effort led to America’s corporate income tax rate being slashed from fifty percent to thirty-five percent. Since then, attempts to continue lowering America’s corporate income tax rate have failed, leaving America with the fourth highest corporate income tax in the world.
Recently, I introduced a bill in the House of Representatives, H.R. 2 Raising America’s Economic Competiveness, which is also referred to as simply Raising Competiveness Act (RCA). The RCA amends the Internal Revenue Code of 1986 and lowers America’s corporate income tax to twenty-eight percent. Competitively, this puts America on par with Europe, which has a regional average rate at 25.58%, when weighted by Gross Domestic Product …show more content…
With pass-through income being subject to a rate up to 39.6%, this is damaging to businesses.
The RCA taxes pass-through income at a maximum rate of twenty-five percent. It also shifts partnerships and S-Corporations that are “big-businesses”, companies that make more than ten million in revenue, to be subject to the corporate income tax instead of the pass-through tax rate. The reason for this, is because when the reforms of 1986 were implemented, most business income was earned by C-Corporations. Broadening the tax base mitigates the lost revenue from the initial period when the tax will be cut.
All proprietorships will remain taxed at the pass-through rate, since 91% of all proprietorships are small businesses. This will create an environment that will allow small businesses to grow across the U.S., and it will unleash the creative ingenuity that makes American companies superior to those
Recently, I introduced a bill in the House of Representatives, H.R. 2 Raising America’s Economic Competiveness, which is also referred to as simply Raising Competiveness Act (RCA). The RCA amends the Internal Revenue Code of 1986 and lowers America’s corporate income tax to twenty-eight percent. Competitively, this puts America on par with Europe, which has a regional average rate at 25.58%, when weighted by Gross Domestic Product …show more content…
With pass-through income being subject to a rate up to 39.6%, this is damaging to businesses.
The RCA taxes pass-through income at a maximum rate of twenty-five percent. It also shifts partnerships and S-Corporations that are “big-businesses”, companies that make more than ten million in revenue, to be subject to the corporate income tax instead of the pass-through tax rate. The reason for this, is because when the reforms of 1986 were implemented, most business income was earned by C-Corporations. Broadening the tax base mitigates the lost revenue from the initial period when the tax will be cut.
All proprietorships will remain taxed at the pass-through rate, since 91% of all proprietorships are small businesses. This will create an environment that will allow small businesses to grow across the U.S., and it will unleash the creative ingenuity that makes American companies superior to those