Bill > HR3018

This bill, titled the "Corporate Assets Should be used to Hire Act," proposes to amend the Internal Revenue Code to impose a temporary additional tax on domestic corporations for taxable years beginning in 2011 or 2012. Specifically, it would levy a 40% tax on the amount by which a corporation's retained earnings (profits kept by the company rather than distributed to shareholders) in a given year exceed their average retained earnings over the preceding three years. This measure aims to encourage companies to use their accumulated profits for hiring rather than simply holding onto them. However, the bill includes exceptions: it would not apply to corporations whose retained earnings are less than $5 million in a taxable year, nor to increases in retained earnings that are legally required by federal law or regulation, nor to corporations that were not in existence for the entire three-year period used for calculating the average. The bill also clarifies that "retained earnings" refers to the net increase in accumulated profits within a taxable year, and it includes provisions to account for predecessors of a corporation. Any revenue generated from this tax is designated for federal deficit reduction or debt reduction.