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Senate Republican tax chief wants dividend deduction in tax reform

Senator Orrin Hatch (R-UT), Chairman of the Senate Finance Committee, is seen during an interview on Capitol Hill in Washington, DC, U.S. July 31, 2017. REUTERS/Aaron P. Bernstein

WASHINGTON (Reuters) - The U.S. Senate’s top Republican on tax policy said on Tuesday that allowing U.S. corporations to deduct dividend payments to shareholders from federal income tax could overcome problems facing Republican efforts to overhaul the U.S. tax code.

In a statement at the outset of a tax reform hearing, Senate Finance Committee Chairman Orrin Hatch said he sees the proposal known as “corporate integration” as a way to end the perceived double taxation of U.S. companies through tax legislation that would also reduce the statutory U.S. corporate income tax rate, which now stands at 35 percent.

“This idea – whether it applies fully or in some other limited way – can help address a number of the problems we’re trying to solve with comprehensive tax reform,” said Hatch, a member of the “Big Six” tax policy makers from the Trump administration and Congress who are expected to issue a tax reform blueprint next week.

Reporting by David Morgan