GOP Sen. Johnson promotes tax plan he says differs from party's framework

WASHINGTON  (Gray DC) -- From the campaign trail to the Capitol, simplifying the tax code for families and businesses is a familiar Republican refrain.

However, Senator Ron Johnson (R-Wisconsin) says he's eyeing something a bit different.

Johnson said, "Well I've got slightly different ideas than what the GOP framework is."

Not all businesses are taxed the same. Mom and Pop stores are known as passthroughs - essentially the government taxes the owners, not the company.

Joann Weiner, an associate economics professor at George Washington University, explained, "Something like over half of all U.S. business income is earned in these pass-through organizations. They're taxed at only the individual level, not the corporate level."

The Government also taxes owners of America's largest companies - you know them as shareholders.
But, the company itself - known as a C-Corp - gets hit with a tax bill too.
While most Republican plans focus business tax reform on reducing rates - Johnson wants to eliminate the C-Corp tax bill, and have big companies play by the same rules little ones do.

Johnson said, "Make those businesses, their owners pay the taxes."

Johnson says double-taxing America's biggest employers hurts the employees more than the company - with cash going to the government rather than raises. But Johnson's critics say the tax cut would benefit wealthy investors, not regular workers.

"It's a backdoor way of giving a tax cut to the top.", said Weiner. She says the change would give wealthy individuals a loop-hole on their personal taxes.

Weiner said, "The problem with doing something like that is if you take a look at the details, dig into the weeds of this, turns out about half of that business income is earned by the top one percent. So there's your tax cut for the wealthy again."

Despite some criticism, Johnson continues to pitch his plan to people in Washington.
Right now, it appears the senator's plan could serve as a backup option if leadership can't find enough support for current GOP framework.



 
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