House Republicans Propose 25 Percent Corporate Tax Rate
By J. Craig Shearman
Washington Retail Insight
March 21, 2012
Less than a month after President Obama proposed lowering the nation’s top corporate tax rate to 28 percent from the current 35 percent, House Republicans this week released a budget proposal that would lower the rate to 25 percent.
The reduction would be part of “a tax code that fosters growth and job creation by lowering rates and getting rid of special-interest loopholes,” Budget Committee Chairman Paul Ryan, R-Wisc., said.
Ryan on Tuesday led his caucus in presenting a 98-page budget intended as an alternative to the spending plan proposed by Obama in February. Included was a tax reform section that would reduce the corporate rate to 25 percent in return for “broadening the base” by eliminating tax deductions and credits that benefit only a few industries. The plan would also consolidate the current six individual income tax brackets into two, at 10 percent and 25 percent, and eliminate the Alternative Minimum Tax.
NRF, which has long supported efforts to broaden the tax base and substantially lower tax rates for all businesses, welcomed the proposal, saying the plan shows bipartisan support is building for tax reform that would boost the economy and help create jobs.
“This proposal is further evidence that both sides of the political aisle, both chambers of Congress and both ends of Pennsylvania Avenue all agree that the time for comprehensive, pro-growth tax reform has come,” NRF Senior Vice President for Government Relations David French said. “Tax reform is an opportunity for Washington to put its political differences aside and come together for the good of our nation’s economy and the American workers who need jobs to put food on their families’ tables. Seeing tax reform proposals put forth by leaders of both parties within a month of each other is a welcome sign that tax reform could soon be a reality.”
Obama last month proposed similar base broadening and a reduction in corporate taxes to 28 percent. Committees in both the Republican-controlled House and Democrat-controlled Senate have been holding hearings on tax reform for several months, and NRF is pushing lawmakers to pass legislation on the issue as quickly as possible.
NRF has argued before Congress that reform would make the tax code more economically efficient and make it easier for companies to make decisions based on business reasons rather than tax implications. Retailers would also likely see savings that could be passed along in lower prices, thereby increasing consumer demand and increasing jobs throughout the supply chain.
© 2012 National Retail Federation
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