April 19, 2015

MSCI Argues The Only Type Of Tax Reform That Is Fair Is Comprehensive Tax Reform

According to Congressional Quarterly (subscription required), U.S. Senate Finance Committee Chairman Orrin Hatch (R-UT) and U.S. House Ways and Means Committee Chairman Paul Ryan (R-WI) are open to working with the White House to pass corporate-only, rather than, comprehensive tax reform. (Corporate-only tax reform would address the corporate income tax system only and would not address the individual income tax system, which is used by 94 percent of U.S. businesses.) 

Indeed, the two lawmakers stated this position in a letter last week to MSCI. As Congressional Quarterly reports, Chairman Hatch and Chairman Ryan argued lowering the “individual income tax rate isn’t in the cards while President Barack Obama is in office.” 

MSCI President and CEO Bob Weidner responded to the two chairmen in a letter that will be sent today. Weidner said, “Reforming the corporate code while leaving individual rates alone would seriously disadvantage my S-Corp members – and millions of other U.S. companies – not only against their U. S. corporate competitors, but also against their competitors abroad. U.S. job creators deserve equal treatment by the IRS. Our corporate rate is the highest in the world and it must be cut, but not at the expense of making our tax code less fair.” Weidner also said, “If we are going to get tax reform done, Americans deserve to have it done right, not through a piecemeal approach that would disadvantage businesses that employ two thirds of American workers, create more jobs, and pay more in taxes. I urge you to hold out for comprehensive tax reform.” 

Also last week: MSCI signed a letter with more than 100 other organizations arguing for comprehensive reform. That letter, which was organized by the S Corporation Association, said, “Congress needs to reduce the tax rates paid by individuals and corporations to similar, low levels. The fiscal cliff negotiations in 2012 resulted in pass-through businesses paying, for the first time in a decade, a significantly higher top marginal tax rate than C corporations. Splitting business income and taxing it at different rates penalizes pass-through businesses and encourages planning to circumvent the higher rates, ultimately resulting in wasted resources and lower growth. To ensure that tax reform results in a simpler, fairer and more competitive tax code, Congress needs to reduce top tax rates for all types of taxpayers.” 

Please contact MSCI Vice President of Finance and Government Affairs Jonathan Kalkwarf if you are interested in reading Weidner’s letter, the letter to MSCI from Chairman Hatch and Chairman Ryan or the S Corporation Association letter.