Congressmen Dave Reichert (WA-08) and Ron Kind (WI-03) today introduced the S Corporation Modernization Act (H.R. 892). This tax relief proposal that would make it easier for S corporations to access capital, compete, and hire new workers by modernizing outdated rules that currently stifle their growth. A 2011 independent study revealed tax law dealing with S corporations affects 31 million Americans as S corporations employ one out of four workers in the U.S. private sector.
"S corporations and similar businesses are responsible for more than half of the jobs in Washington State and across America," Rep. Reichert said. "As our economy continues to struggle to regain sound footing, I'm proud to introduce bipartisan legislation to help these proven job creators access the capital needed to grow, compete, and get Americans back to work. Working with the Ways and Means Committee toward comprehensive tax reform, I am committed to supporting these small businesses by advocating for pro-growth tax policies."
"This bill is a commonsense update to the tax code that will give S corporations the ability to grow and prosper especially in this tough economic environment," Rep. Kind said. "It is critical that we ease the tax burden on our small and family owned businesses who are driving our economic growth. Under this legislation, S corporations will be better able to access credit, invest in their business, and create the good paying jobs that we need."
"Tax reform should seek to make the entire U.S. economy more competitive, not just a subset of large corporations," stated S Corporation Association Executive Director Brian Reardon. "If you're going to tackle tax reform, it must include both the corporate and individual tax codes in order to assist all employers. In the face of proposals that would make the majority of America's employers less competitive, the Reichert-Kind legislation presents a realistic set of reforms that would improve the ability of 4.5 million S corporations to access much-needed capital and increase their hiring capabilities."
Specifically, H.R. 892 would make needed changes to keep S corporations competitive and ensuring continued success of America's predominant private business model by:
· Increasing the ability of S corporations to access much-needed capital;
· Modernizing the rules that apply to firms that have selected S corporation status; and
· Easing and expanding S corporations' ability to make charitable donations
These reforms would improve the ability of S corporations to respond to the current business environment and remove impediments that prevent them from competing on a level playing field at home in the United States.