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house Bill H.R. 629

Tax Cuts for S-Corporations

Argument in favor

Would free up S corporations' access to capital, which in turn could spur economic growth and create more jobs.

LibertyForAll's Opinion
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01/02/2016
Replacing the current tax code with a Flat Tax, allows for Private Capital to be reinvested into the American market. Thus providing the "American Working Man" with jobs, skills, higher wages and employment. With out such massive Capital investments, American workers will continue to lose to cheap foreign labor.
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John's Opinion
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06/28/2015
Cut taxes whenever possible, but also cut spending by $2 for every tax dollar cut.
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billwdk9's Opinion
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08/06/2015
Cutting taxes on all businesses makes good economic sense. It would increase employment and thus broaden the tax base.
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Argument opposed

This bill is an undisguised tax cut for big business and would increase the federal deficit by $1.5 billion over the next decade.

Steven's Opinion
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01/21/2016
No more corporate welfare, let them pull themselves up by the bootstraps like "real Americans".
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AndrewGVN's Opinion
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12/03/2015
NO NO NO we need to fix all these tax loopholes that big corporations are taking advantage of before we offer more tax cuts to more corporations. And in before Congress proposes more cuts in social security to cover this tax break, give me a break.
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resistor's Opinion
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11/22/2015
No. Our ridiculous tax code should be replaced with a flat tax that EVERYONE PAYS - no loopholes.
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What is House Bill H.R. 629?

This bill would permanently cut in half (from 10 years to 5 years), the length of time that S corporations have to pay the built-in gains tax, commonly referred to as the "BIG tax." S corporations, according to the Internal Revenue Service (IRS), 

"are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes." 

They generally don't pay corporate taxes and are limited to 100 shareholders. C corporations, on the other hand, are taxed separately from, and in addition to, their shareholders. When an S corporation turns into a C or acquires assets from a C, they have to pay the BIG tax for specific types of profits the corporation earned while they were a C corporation. 

The same reductions would also be applied to regulated investment companies and real estate investment funds. 

Impact

S corporations operating in the United States; shareholders of S corporations; the IRS.

Cost of House Bill H.R. 629

$1.50 Billion
The CBO estimates that enacting the bill would reduce revenues, thus increasing federal deficits, by $1.5 billion between 2015 and 2025.

More Information

In Depth: Sponsoring Rep. David Reichert (R-WA) explained in a press release that the bill would help create jobs:
""These are common sense reforms of our current tax code that would help proven job creators — S Corporations — to access the capital they need to grow, compete nationally and globally, and get Americans back to work."
Rep. Reichert continued:
"Hard working Americans should be able to use the money they earn to provide for their families and enjoy the benefits of their labor, not give it away to their government because of an outdated and overly-burdensome tax code."
Of Note: This bill isn't the first to deal with S corporation taxes. It currently has a companion bill in the Senate. Additionally, Rep. Reichert has introduced nearly identical legislation to this bill four times, in 2011, 2013, 2015, and 2016. None of those bills have reached a vote in the House.

Media:

AKA

Permanent S Corporation Built-in Gain Recognition Period Act of 2015

Official Title

To amend the Internal Revenue Code of 1986 to make permanent the reduced recognition period for built-in gains of S corporations.

bill Progress

  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedJanuary 30th, 2015