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FEDERALhearing transcript

Senate Hearing on Corporate Tax Reform and Dividend Deductions

Original title: INTEGRATING THE CORPORATE AND INDIVIDUAL TAX SYSTEMS: THE DIVIDENDS PAID DEDUCTION CONSIDERED

Record date · January 1, 2017

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What This Bill Does

The Senate Committee on Finance held a hearing on May 17, 2016, to discuss the potential of corporate and individual tax systems. The discussion focused on the '' as a method to address the issue of double taxation on corporate earnings.

Why it matters

This hearing explored legislative proposals to change how corporate profits are taxed, which could alter the tax burden for corporations and shareholders and impact overall business investment levels.

Who It Affects

Groups the bill's text affects, as described in the record. Being affected is not a position for or against it.

Directly affected

Corporations

Changes to the dividends paid deduction would alter the amount of corporate income subject to federal tax.

Directly affected

Shareholders

Integration of tax systems would change how dividend income is taxed at the individual level.

Key Facts

The current U.S. tax system taxes corporate income twice: once at the corporate level (generally 35%) and again at the individual level when distributed as dividends (up to 25%).
The hearing examined the 'dividends paid deduction' as a mechanism to integrate corporate and individual tax systems.
Chairman Hatch stated that the current system contributes to an anti-competitive business climate and encourages tax avoidance.
The hearing took place on May 17, 2016, in the Dirksen Senate Office Building.

Show all 5 facts

Four expert witnesses provided testimony regarding tax policy and retirement implications.

Frequently Asked Questions

What is double taxation in the context of corporate earnings?

It refers to the practice of taxing corporate profits at the corporate level and then taxing those same earnings again as dividends when they are paid out to individual shareholders.

What is a 'dividends paid deduction'?

It is a proposed tax policy change that would allow corporations to deduct the dividends they pay to shareholders from their taxable income, potentially eliminating the second layer of tax.

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Full breakdown

Who this bill affects and the strongest case for and against it, written only from the bill’s own text.

Discoveries

1 pattern noticed across the record

Patterns POLISCOPE noticed across the record. These are observations to investigate, not conclusions.

policy shift90% confidence

Focus on Double Taxation

The hearing highlights a specific legislative interest in 2016 in moving away from the classical double-taxation model of corporate income.

Senate Committee on Finance

Connected Entities

Orrin G. Hatch, Ron Wyden, Steven M. Rosenthal and 4 more

PersonOrrin G. Hatch“Chairman of the Senate Committee on Finance”Map →

PersonRon Wyden“Senator from Oregon, Committee on Finance”Map →

PersonSteven M. Rosenthal“Witness, Urban-Brookings Tax Policy Center”Map →

PersonBret Wells“Witness, University of Houston Law Center”Map →

PersonMichael J. Graetz“Witness, Professor of Tax Law at Columbia University”Map →

OrganizationSenate Committee on Finance“Congressional committee overseeing tax legislation”Map →

PersonJudy A. Miller“Witness, American Retirement Association”Map →

Sources

Open source document

www.govinfo.gov

Analysis Score

0–100

Significance65
How much this matters to a regular citizen
Controversy40
Intensity of disagreement among stakeholders
Entertainment10
Compellingness for a non-policy-wonk reader
Buzz15
Current news / social attention level

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