Which companies get tax breaks? | Reuters
A top Senate Republican wants to overhaul the tax code to help companies with sales tax and corporate income taxes.
The bill would give them a break that has been a long-held Republican dream: an incentive to reduce their tax bills.
But the bill’s top Democrat, Sen. Ron Wyden, is pushing for a different type of tax relief.
Wyden’s bill, called the Dividend Tax Relief Act, would offer some tax relief to companies that have earned significant profits and use a tax credit for their income taxes paid.
Widen’s proposal would also allow companies to use the credit against the tax bill.
“Companies that have substantial earnings or cash flow that they can invest in, for example, technology, are able to save on taxes by using this credit,” Wyden said in a statement on Thursday.
“I’m hoping that by reducing the number of tax credits available, we can help more small businesses, and encourage more Americans to become part of this economy that provides more opportunities and higher wages for Americans.”
Wyden has been pushing the Senate to pass his bill, dubbed the Dutchie Tax Relief Reconciliation Act, since it passed the House of Representatives earlier this month.
It would offer the same type of incentives for companies that earn more than $1 million a year.
It also would provide tax breaks for some of the wealthiest Americans.
WIDEN’S PLAN Would provide tax relief for companies with substantial earnings and cash flow, but only for those that earn at least $1.5 million.
That means the bill would not affect companies with annual income above $150 million.
Companies would still have to pay taxes on the profits of the year they earned them.
But they would only be required to pay those taxes on their taxable income.
WEDNESDAY’S KEY POINTS: The Senate bill would also give the government $1 trillion in new revenue over the next decade to cover the cost of the dividend tax relief package, which is set to expire at the end of the decade.
It’s a sizable sum to pay for the tax cuts, but it is far less than the $1,000 tax cut Wyden proposed earlier this year.
WASHINGTON — The Senate Finance Committee passed a bill Thursday to overhaul taxes that benefit corporations and businesses.
It includes $1 billion in corporate tax relief and $1-trillion in corporate income tax relief, and would extend the 10-year expensing of some of those tax breaks.
The Senate has yet to approve the legislation.
The committee is expected to vote on the bill Friday, but its passage would not be required if Democrats win the Senate in November.
WINDOW DOWN: President Donald Trump’s administration is also working on its own version of the tax plan.
The White House has said that the administration is finalizing a plan that would also extend expensing for some tax breaks and allow companies that pay more to deduct their investment income.
The administration also is considering a plan with a much higher tax rate, which would raise the top rate to 39.6 percent.
President Donald J. Trump speaks during a rally in Nashville, Tenn., on March 27, 2021.
The House is expected next week to vote in favor of the Senate version of Wyden-Wyden’s legislation.
President Trump has already said he would sign the bill, though the White House hasn’t indicated when he might sign it.
WYDEN’s DEBATE: Senate Minority Leader Chuck Schumer, D-N.Y., is expected this week to take a similar position to Wyden.
He’s pushing to provide tax cuts for companies, rather than individual taxpayers.
“This bill does nothing to encourage the growth of small businesses or businesses that make the biggest investments,” Schumer said in an interview on Thursday with The New York Times.
“The biggest impact of this bill is that it incentivizes companies to be less profitable, so they don’t have the incentive to reinvest in their workers and their employees, their schools, their universities.”