Senate Finance Committee Chair Orrin Hatch, R-Utah, has provided
new details on his corporate integration proposal and is waiting on
the Joint Committee on Taxation (JCT) for a revenue score.
Hatch is hoping to advance legislation that would address the
double tax on corporate earnings by providing a deduction at the
corporate level for dividends paid to shareholders. Hatch hopes to
attract Democratic support and keep the proposal revenue neutral by
raising the tax rate on dividends, which is currently at 20% before
the 3.8% tax on net investment income.
He is working with the JCT, the official scorekeepers of Congress,
on addressing the revenue issues. It may be difficult to keep such
a proposal revenue neutral because so many corporate shareholders
are tax-exempt entities like pension plans. Hatch also appears
committed to leaving the current capital gains rate intact.
In addition, Hatch said he will continue to work with Brady on
international reform, but believes corporate integration could do
more to encourage investment in the United States and stem the tide
of inversions. Major reform is difficult in an election year, but
Hatch's plan could provide important fodder for future tax
reform efforts.
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