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French Hill Outlines Tax Reform Priorities

3 min read

Arkansas’ 2nd District Congressman French Hill talked tax reform during a speech Tuesday to the Little Rock Rotary Club.

The Republican and former banker said he expects Congress to reconvene in September with a “unified approach” to tax reform crafted by the Trump administration and congressional tax leaders.

The Congress would then debate the proposals in the fall.

“Personally, I want to speak out for competitiveness on the international front, and also this idea of the way businesses are taxed,” Hill said after his speech. “I think that’s an important contribution I can make because of my business background.”

Hill said his priorities for reform include making the U.S. more competitive with other countries in its tax policies and changing how businesses pay taxes. 

“The plan would be to drop the C-corp rate as much as they think they can and make it territorial, which means that international businesses that are paying taxes at the normal C-corp rate would no longer be double taxed when they bring money taxed abroad back into the U.S.,” he said. “Maybe we can also connect that to an infrastructure plan.”

Hill would also like to change how businesses using a pass-through entity like an LLC, LP or S-corp pay taxes.

“… [T]here would be a business income tax for pass-through entities, and people would no longer being paying at the personal rate for all the dollars that they distributed to themselves,” he said. “They’d have some compensation, they’d pay income tax rates on that — but the business would pay a low, fixed business income tax rate.”

During his speech, Hill noted the long period of low interest rates engineered by the Federal Reserve. While unemployment is low, Hill said economic growth still isn’t what it should be, and that the U.S. tax structure — along with an over-regulated business sector — is holding back growth.

“This tax issue is something that holds back our rate of growth, and I think Congress on a bipartisan basis is interested in pursuing [reform] this year with the president,” he said.

Hill was optimistic that Congress will be able to do tax reform, despite the inability of the Republican-controlled House and Senate to repeal and replace the Affordable Care Act, which the GOP has long promised to do. Hill said tax reform doesn’t pose the challenge of trying to “reform an existing bill,” and he cited the administration’s and congressional leaders’ aim to start with a common tax plan to take the House and Senate. 

Still, he said the process won’t be easy.  

“This will be hard work, it will take a lot of effort on the part of people on both sides of Capitol Hill and in the administration,” he said.

To that point, Hill said President Trump and Treasury Secretary Steven Mnuchin must be active in crafting reform.

“I think the president and the secretary of the treasury have to be deeply engaged with the process, first in designing their priorities and making sure the members of the House and Senate know what are their specific priorities,” he said. “And then working with members to get a plan over the goal line. It’ll take deep engagement by both the treasury secretary and the president.”

Hill also talked about North Korea, which he called the United States’ single biggest threat. He praised the Trump administration’s moves to impose sanctions on the regime and other efforts to discourage the country from further developing nuclear capabilities.

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