House Ways And Means Chief Says Tax Reform Must Be Comprehensive
In an interview last week with The Wall Street Journal, U.S. House Ways and Means Chairman Paul Ryan (R-WI) said Congress must pass corporate tax reform alongside reform for pass-through businesses and S-corporations. Chairman Ryan said, “There’s a big difference between our view and the president’s view. [President Barack Obama] believes we should have higher tax rates on individuals. We think they should be lower. And when eight out of 10 businesses in America are what we call pass-throughs, LLCs, sole proprietors, sub S corporations, their top effective tax right now because of this president is 44.6 percent. The international average tax rate on businesses is 25 percent. So we have to get these rates down across the board. That is something that the administration doesn’t share with us. So there’s an impasse. The question is what can we do in the meantime that gets us a step in the right direction.”
Earlier this year, it seemed as if Chairman Ryan and Senate Finance Committee Chair Orrin Hatch (R-UT) were willing to pursue corporate tax reform this year – since the White House favors bringing down the corporate rate – and to wait for broader reform after President Obama left office. Thanks in part to letters MSCI and other business groups sent to Capitol Hill, Rep. Ryan and Sen. Hatch now seem to agree that reform must be done in a comprehensive manner that reduce rates for non-C corporation entities as well.
Despite the impasse Rep. Ryan discussed, lawmakers on Capitol Hill are continuing to assemble ideas for comprehensive reform. The five Senate Finance Committee working groups will turn in their recommendations for tax reform to the full committee this month. Stay tuned to Connecting the Dots for more on those recommendations as they are released.
In the meantime, if you are interested in relaying your thoughts on tax reform to the House Ways and Means Committee or the Senate Finance Committee, the National Association of Manufacturers has produced a list of House committee staff and Senate committee staff.