Last summer, the House released its Better Way Plan, which included plans for tax reform. Likewise, the President-elect released his Contract with the American Voter, which identifies tax reform and simplification as one his top priorities to help Americans. The plans are similar in some ways but also differ from one another:
- Individual Tax Rates:
- Better Way Plan and Contract with American Voter: three mostly lower brackets, set at 12%, 25% and 33%.
- Corporate Tax Rates:
- Better Way Plan – 20%. Eliminate most credits and deductions (except R&D).
- Contract with American Voter – 15%.
The National Restaurant Association supports comprehensive tax reform that provides restaurants with greater certainty and fosters economic growth and job creation. Tax reform should:
- Address both individual and corporate taxes to reflect the diversity of business models within the restaurant industry.
- Maintain the 45(B) FICA Tax Reimbursement for restaurants with tipped employees. The desire for tax simplification means most if not all credits and deductions are likely to be eliminated. Therefore, it is incumbent upon us to continue educating Congress about 45(B) FICA Tax Reimbursement and the important credits and deductions that matter to restaurant and foodservice operators.