House Ways and Means Committee chairman Paul Ryan, the Republican congressman from Wisconsin, detailed his tax reform plans during a speech before the American Institute of CPAs at the AICPA’s Spring Meeting of Council in Washington, D.C. Ryan detailed the importance of business tax reform to improve the national economy and promote investment in the country.
Paul Ryan On Tax Reform
“One of the primary sources of uncertainty in this economy today has been our Tax Code,” explained Ryan, who ran as the Republican Vice Presidential nominee in the 2012 election. “We as Republicans in Congress would like to have comprehensive tax reform across the board… It’s very important to know, as you probably know, most businesses in America are not C Corps. Most businesses in America pay their taxes as individuals, Sub S’es, LLCs, sole proprietorships. You know the story better than anybody else in the country. For us, tax reform is broadening the base before lowering the rates across the board so that we can get our rates back to a competitive area.”
At the same point, Congressman Ryan emphasizes the importance of tax compliance when it comes to any future tax reform. If taxes are not going to be raised, then the taxes owed need to be paid. By enforcing the current tax code, tax reform becomes possible to help American business owners.
No Tax Increases, But Tax Compliance
“Chairman Ryan opposes any tax increases, and that’s why the revenue offsets are strictly limited to measures that help ensure people pay the taxes that they already owe,” clarified Brendan Buck, a spokesman for Ryan.
In Canada, Paul Ryan pointed out businesses are taxed at a rate of 15 percent. In fact, the average tax rate for businesses in industrialized countries is 25 percent. For C corporations in the U.S., the top marginal tax rate is 35 percent. In fact, many business owners face top tax rates of over 44 percent when other taxes such as the 3.8 percent Net Investment Income Tax or the 0.9 percent Additional Medicare Tax are added to the 39.6 percent top tax rate for individuals.
Worldwide Tax System
“This is not good for American businesses,” said Paul Ryan. “This is not good for America’s competitiveness… we have one of the worst tax codes in the industrialized world. So we know that we need to get on top of this issue and get our rates down, fix the mess we have with this byzantine worldwide tax system that is uncompetitive, pushing capital overseas, triggering corporate takeovers of foreign companies buying U.S. companies and encouraging inversions.”
The international tax team at LSL CPAs believes in the necessity of simplifying the tax code to support local businesses. The tax code should be a positive and not a negative influence on American business interests. Congressman Ryan explains the importance of tax reform when he says; “We want to have a good down payment on tax reform in this Congress… Tax reform is paramount. We can have another great American century, but you need to have fundamental tax reform.”
International Tax Team
For the international tax team at LSL CPAs, such priorities highlight the importance of having experienced tax professionals with a full awareness of the current tax system to ensure proper compliance. To learn more, please call LSL CPAs international tax accountant Yana Weaver at 714.569.1000.
