Vern Buchanan to focus on tax reform in next Congress – Florida Politics (blog)
Republican U.S. Rep. Vern Buchanan said last week he planned to keep pushing for a bill that would even out the tax rates between taxes for small businesses and corporations in the next Congress.
Many small businesses are formed as S-Corporations, which operate as pass-throughs for shareholders. Shareholders of these businesses pay no business taxes, and instead have their earnings taxed at their often-higher individual tax rate.
“Let’s stop placing these small- and medium-sized businesses at a competitive disadvantage against large corporations. I’m optimistic that my legislation to level the playing field will play a significant role in upcoming tax reform efforts,” Buchanan said.
“If we want to energize the economy and create more jobs, we need to ensure that small businesses don’t pay a higher tax rate,” he added.
Buchanan said he would push for a single-rate business tax regardless of who was elected president, though his goal will likely be easier to achieve with incoming President-elect Donald Trump, who advocated a similar policy on the campaign trail.
Trump’s plan calls for a 15 percent rate both for business income for corporations and for pass-through businesses.
Unlike Trump’s plan, Buchanan’s proposal would prohibit business income of individuals from being taxed at a higher rate than corporate income, though he hasn’t laid out any specific rates.
Currently, S-Corporation owners pay up to 39.6 percent tax on their earnings, the top income tax bracket for individuals, compared to corporations, which pay 35 percent tax.
Buchanan said simply lowering the corporate tax rate “does nothing” for the many American businesses formed as pass-through corporations.
Among the 11 co-sponsors of Buchanan’s plan are Texas Republican Rep. Bill Flores, chairman of the Republican Study Committee, and North Carolina Republican Rep. Mark Meadows, a leader of the Freedom Caucus.