U.S. Sens. John Thune (R-S.D.) and Ben Cardin (D-Md.), co-chairs of the Senate Finance Committee’s Business Income Tax Working Group, today submitted the working group’s report to the full committee. The report, developed with the input of the fourteen members of the working group, represents the culmination of a months-long examination of business tax issues in an effort to evaluate the challenges and opportunities posed by reforming America’s business income tax system.
Earlier this year, U.S. Sens. Orrin Hatch (R-Utah) and Ron Wyden (D-Ore.), chairman and ranking member of the Senate Finance Committee, asked Thune and Cardin to lead the Finance Committee’s Business Income Tax Working Group. Additional working groups were tasked with examining an array of subjects, including the individual income tax, savings and investment, international tax, and community development and infrastructure.
“We accepted this request because we believe that American businesses deserve a better tax system than the current tax code,” said Thune and Cardin. “We view the working group process as a demonstration of the importance that the chairman and ranking member place on enacting tax reform, a goal that we share. We took on the challenge of co-chairing the working group knowing that progress toward real tax reform will not be fast or easy, but rather will entail thoughtful deliberation around a number of very complex and difficult decisions.”
The report includes several principles, considerations, options, and recommendations that are designed to modernize U.S. business taxation to help spur economic growth and job creation, address structural biases in the tax code, and promote American innovation.
In particular, the report:
- Highlights the challenges related to business tax reform, including potential hurdles to corporate rate reduction
- Discusses the effect of reform on pass-through businesses, which make up a majority of U.S. small businesses
- Addresses major structural issues and options for pro-growth reform, including corporate integration proposals and moving the U.S. tax system closer to a consumption-oriented base
- Details proposals that promote American innovation, including a strengthened R&E credit, an innovation box, and technology- and source-neutral energy incentives
- Discusses simplification and other administrative proposals that could help both businesses and charities
A copy of the full report can be found here.
A full list of co-chairs and members of the working groups can be found here.