If enacted, HB3210 would eliminate the requirement for corporations to calculate and pay an alternative minimum tax, potentially reducing the overall tax burden on those companies. Proponents of the bill argue that this repeal would encourage business growth and investment, allowing companies to reinvest more of their earnings into their operations, thereby bolstering the economy. This change could facilitate compliance by simplifying the tax code for corporations, removing a layer of complexity associated with the AMT calculations.
Summary
House Bill 3210, titled the 'Book Minimum Tax Repeal Act', seeks to amend the Internal Revenue Code of 1986 by repealing the corporate alternative minimum tax (AMT). This bill was introduced in the House on May 11, 2023, by Mr. Arrington and has been referred to the Committee on Ways and Means. The repeal would impact corporations that are currently subject to this tax, which was originally designed to ensure that corporations pay a minimum level of tax, regardless of deductions and credits they may otherwise use to reduce their taxable income.
Contention
However, there are notable points of contention surrounding HB3210. Critics argue that repealing the AMT could significantly reduce tax revenues, disproportionately benefiting large corporations while failing to address the tax obligations of smaller businesses or individuals. There are concerns that this could widen income inequality and reduce the government’s ability to fund public services. Additionally, some lawmakers question whether the economic growth anticipated from such tax reductions will materialize, raising the issue of whether the bill supports general economic viability or merely serves the interests of large corporations.
FairTax Act of 2023 This bill imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income taxes, payroll taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2025, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property; for property or services purchased for business, export, or investment purposes; and for state government functions. Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines. The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury. Tax revenues are to be allocated among (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund. No funding is authorized for the operations of the Internal Revenue Service after FY2027. Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill.
Small Business Prosperity Act of 2023 This bill modifies the tax deduction for qualified business income to (1) make such deduction permanent, (2) limit to 21% the top tax rate on qualified business income, (3) repeal the limitation on the deduction based on amount of wages paid, and (4) revise the definition of qualified trade or business to mean any trade or business other than the trade of business of performing services as an employee. The bill provides that a change in the organizational structure of a corporation is not a taxable event if there is no change among the owners, their ownership interests, or the assets of the organization, The bill repeals the estate tax after 2022.