Tuesday, Congressman Scott Tipton, (R-CD3), introduced his first piece of legislation in the House. H.R. 1074 aims to reduce the corporate income, capital gains and dividends tax rates to 10 percent—attracting business investment, and incentivizing the creation of new jobs.“I made a commitment during my campaign to level the playing field by reducing tax rates on job creators to spur on economic growth,” Tipton said. “As our country struggles to recover from the worst economic downturn since the Great Depression, our economy is in dire need of a shot in the arm.”
The U.S. currently holds the second highest combined corporate income tax rate of any developed nation in the Organization for Economic Cooperation and Development (OECD). At more than 39 percent, the U.S. combined rate is far above the OECD average of 25 percent, making the U.S. comparatively unattractive to businesses looking to expand operations and create jobs. By cutting the federal corporate income tax rate to 10 percent, we can make America globally competitive once again, and attract business investment, job creation, and economic growth.
History has proven that capital gains tax revenues increase when rates are reduced. This was the case after each of the recent capital gains tax cuts in 1981, 1997, and 2003. A common misconception is that capital gains tax cuts only benefit wealthy Americans, but the reality is that in 2005, 47 percent of tax returns reporting capital gains also reported household incomes under $50,000. Furthermore, capital gains taxes hit middle-class Americans harder, because they can exercise less control over when they realize capital gains.
“We need to provide relief to American families and small businesses and provide the incentive for investment in our economy,” Tipton said. “By reducing corporate income tax, capital gains and dividends tax rates to 10 percent, and making these tax cuts permanent, we can again unlock capital investment, encourage job creation, and drive economic recovery.”
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