[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. Res. 88 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
S. RES. 88

Expressing the sense of the Senate that businesses of the United States 
   should retain the option to organize as those businesses choose, 
including as flow-through entities, and not be forced to reorganize as 
                            C corporations.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 3, 2011

Ms. Snowe submitted the following resolution; which was referred to the 
                          Committee on Finance

_______________________________________________________________________

                               RESOLUTION


 
Expressing the sense of the Senate that businesses of the United States 
   should retain the option to organize as those businesses choose, 
including as flow-through entities, and not be forced to reorganize as 
                            C corporations.

Whereas the tremendous growth in businesses organized as flow-through entities, 
        including S corporations, has resulted in the number of flow-through 
        entities far exceeding the number of C corporations;
Whereas there are more than 26,000,000 businesses operating as flow-through 
        entities in the United States, representing 82 percent of all United 
        States businesses, relative to just 5,900,000 C corporations;
Whereas these flow-through and small businesses create 70 percent of all new 
        jobs and are responsible for 44 percent of the total private payroll in 
        the United States;
Whereas under the Internal Revenue Code of 1986 as in effect in March 2011, 
        these job-generating businesses are taxed at individual tax rates based 
        on the individual income of the business owners, making these businesses 
        highly sensitive to changes in individual tax rates;
Whereas as of March 2011, 50 percent of all income above $250,000 is 
        attributable to flow-through businesses;
Whereas, if individual tax rates increase after 2012 in accordance with the 
        proposals set forth by the President, flow-through businesses will face 
        a massive aggregate tax increase, potentially in excess of 
        $800,000,000,000;
Whereas the Secretary of the Treasury has proposed forcing flow-through entities 
        to reorganize as C corporations to make them subject to double taxation 
        as a way to impose more taxes on these businesses in order to pay for 
        the budgetary policies of the President; and
Whereas forcing corporate reorganizations for purely tax-driven reasons 
        represents a misguided incentive, a misallocation of precious business 
        resources, and a serious threat to job creation: Now, therefore, be it
    Resolved, That it is the sense of the Senate that--
            (1) the Federal Government should preserve the 
        organizational options available for businesses to operate as 
        the businesses choose, including as flow-through entities;
            (2) raising taxes on businesses that create jobs will be 
        detrimental to the economic recovery of the United States;
            (3) generating increased tax revenue on the backs of the 
        small businesses of the United States is inconsistent with, and 
        will impede, job creation; and
            (4) any legislative approach to comprehensive fundamental 
        tax reform should include a debate on the individual rates at 
        which most businesses in the United States should be taxed, 
        rather than narrowly focusing on corporate tax rates or forcing 
        small business owners into corporate status for tax purposes.
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