Tipton’s first bill would cut corporate tax rate
In his first bill, freshman U.S. Rep. Scott Tipton, R-Colo., would reduce taxes on capital gains, and dividends, as well as the corporate income tax, to 10 percent.
Tipton, who was elected in November, introduced H.R. 1074 as the fulfillment of a promise he made on the campaign trail, his office in Washington, D.C., said.
Tipton promised a “10 percent plan” for the three tax rates in his successful campaign against incumbent Democrat John Salazar.
“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 United States, with an effective corporate income tax rate of 39.4 percent, according to the Cato Institute, levies the second-highest combined corporate income tax rate of any developed nation.
Cutting the federal corporate income tax rate to 10 percent would boost economic growth and job creation, Tipton said.
Capital-gains and dividend taxes are indexed to individual income tax rates and to the length of time the assets were held.
In 2005, 47 percent of tax returns reporting capital gains also reported household incomes under $50,000, so the reduction would benefit middle-class taxpayers, Tipton said.
The United States would benefit from lower tax rates because they would attract business, Tipton said.
Lower corporate tax rates, for instance, attracted 600 U.S. companies to Ireland and its corporate rate of 12.4 percent, Tipton’s office noted.
Within the United States, Illinois-based Caterpillar is being courted by four other states after Illinois raised personal and corporate income taxes.
The interest by other states in Caterpillar illustrates how competing states can take advantage of high rates to lure business to lower-tax climates, Tipton’s office said.
Tipton’s measure was referred to the House Ways and Means Committee.
U.S. Sen. Michael Bennet, D-Colo., meanwhile, also is looking at the corporate income tax.
“We have one of the highest corporate tax rates in the world,” Bennet said Friday on National Public Radio. “But we collect a lot less revenue than most places do because of all of the tax loopholes and credits and all kinds of other things that probably are not much about public policy, but are a lot about, you know, who the last lobbyist was to attack the tax code.”