The U.S. Chamber of Commerce called for reducing the corporate tax rate while keeping or expanding several of the tax breaks that lawmakers have considered trimming to pay for a rate cut.
In comments submitted today to the House Ways and Means Committee, the largest U.S. business lobbying group said Congress should expand incentives for corporate research, create faster write-offs for capital investment and make it easier for companies to bring home overseas profits.
The breaks in those areas are among the 10 largest in the corporate part of the U.S. tax code, according to the nonpartisan Joint Committee on Taxation. Lawmakers in both parties have said they want to limit breaks to make any corporate tax changes revenue-neutral for the government.
In its comments, the chamber noted how the individual and corporate tax codes are intertwined and urged lawmakers to change both of them at the same time. Most businesses are taxed through their owners’ individual tax returns and not through the corporate side of the tax code.
“We also understand the challenges presented by this kind of reform but urge the committee to continue its work to reform the code as soon as possible,” the chamber said.
The chamber urged lawmakers not to raise taxes on capital gains or dividends or raise effective tax rates for top earners. The chamber endorsed so-called dynamic scoring, which would allow Congress to consider projected economic growth caused by tax-rate cuts to partially pay for the reductions. Congressional estimators don’t use such an approach.
“Our higher-income earners and successful small businesses already shoulder more than their fair share of the income tax burden,” said the chamber. Its board of directors includes executives from State Farm Mutual Automobile Insurance Co. and Amway Corp.
The Ways and Means Committee, divided into 11 bipartisan working groups, is considering a rewrite of the individual and corporate tax codes.
Representative Dave Camp, the Michigan Republican who is chairman of the committee, has said the panel will approve a bill this year. He wants to cut the corporate tax rate to 25 percent from 35 percent and hasn’t said how he would broaden the tax base to pay for that.
© Copyright 2014 Bloomberg News. All rights reserved.