Supporting Business Through Tax Reform
All Wisconsin business owners know that tax rates are often a significant factor when making important business decisions, such as whether to invest in new equipment, increase staff, or expand facilities.
Most businesses in Wisconsin and the United States, including proprietorships, partnerships, limited liability companies, and subchapter S corporations, are organized as pass-through entities, meaning they are not subject to income tax. Rather, owners are directly taxed individually on income, taking into account their share of profits and losses.
Given this, most business owners are highly sensitive to their marginal tax rate, which currently tops out at 40 percent. And it’s not just the tax rate, but also the complexity of the federal tax code which can be a hindrance to the business community and make owners think twice about growing, updating, or expanding.
With a newly united government, I’m optimistic that comprehensive tax reform can finally be achieved in the 115th Congress – something that hasn’t happened since 1986. Tax reform that lowers rates for job creators, broadens the tax base, and promotes fairness is exactly what our country needs to jumpstart the economy and give our hardworking business owners a hand up.
Too often, when Members of Congress talk about rewriting the federal tax code and making businesses more competitive, their focus turns first to the U.S. corporate tax rate, leaving pass-through entities as an afterthought. True tax reform that spurs investment, innovation, increases wages, reduces compliance costs, and promotes growth should address both corporate and individual tax rates simultaneously.
Under the House Republicans’ Better Way agenda, we will tackle these problems and find solutions that will finally give business owners in Wisconsin and nationwide a tax code that works for them, not against them.
Business owners are the backbone of our nation’s economy. Their ingenuity, entrepreneurial spirit, and ambition is what spurs growth, prosperity, and opportunity for us all. It’s my prerogative to support our business owners and help give them the tools they need to succeed. A smarter, fairer, and flatter tax code is the best way to create an economic atmosphere of opportunity for generations to come.