House Majority Leader Kevin McCarthy, R-Calif., is vowing the GOP's tax reform package will improve "innovation and entrepreneurship — key drivers of economic growth."
His comments came in a column written for the Financial Times.
McCarthy said the U.S. needs a "dynamic tax code that promotes the competition, risk taking and innovation that is the foundation of the 21st century economy."
"Republicans in the House of Representatives believe — and the economic models agree — that the reform plan we are working on with Donald Trump will streamline the tax code and grow our economy," he wrote for the Financial Times.
"Lowering the corporate rate to 20 percent could even add $4,000 or more to the average American's paycheck each year through faster economic growth, according to the White House Council of Economic Advisers.
"While these macro effects are good news, we should not miss how much the plan will improve innovation and entrepreneurship — key drivers of economic growth. There are two parts of this reform that will put Americans and their ideas on top of the 21st century economy: permanent credits toward investments in research and development: and making it easier for rank-and-file employees to own a piece of the company where they work."
He noted the research and development credit will allow "a company to redirect money from federal taxes to fund up to 20 percent of its R&D spending."
He also pointed out employees of private companies are often given stock options in lieu of immediate pay. However, when employees choose to exercise those options, they are met with a tax bill on the gains, he said.
"As part of the tax-reform plan, House Republicans are advocating a simple solution," he said. "We will defer the tax on private stock gains until employees can actually realize those gains by selling the stock, or at least give them a reasonable amount of time to pay the tax bill."
And he added the plan "puts the U.S. in the best position to innovate and lead in the 21st century."
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