A pair of lawmakers have introduced a bipartisan bill in the House to end a 78-year-old tax provision that includes dividends from controlled foreign corporations in personal holding company income.

U.S. Congressmen Jim McDermott, D-Wash., and Dave Reichert, R-Wash., who are both members of the tax-writing House Ways and Means Committee, have introduced The Personal Holding Company (PHC) Tax Parity and Reinvestment Act (H.R. 6660) in the House. The legislation would reform the personal holding company rules, originally enacted under the Revenue Act of 1934, to promote economic growth while raising revenue.

Jim McDermott

“As we move forward with tax reform, it’s critical that we carefully examine and update the tax code to address the realities of international business in today’s global economy,” McDermott said in a statement. “This bill addresses an outdated provision dating back to the 1930’s and is a good example of how thoughtful reforms can raise revenue and promote economic growth.”

H.R. 6660 would exclude controlled foreign corporation dividends from the definition of personal holding company income. Congress’s Joint Committee on Taxation estimates the legislation would raise $10 million in revenue over 10 years, and the lawmakers said the bill would update the Tax Code to support economic growth and increased commerce.

Dave Reichert

“I am proud to introduce H.R. 6660,” said Reichert. “It illustrates that good, bipartisan legislation can still be created in Washington, D.C. This bill removes an outdated surtax, raises revenue, and is an example of how bipartisan tax reform can help companies grow and create jobs.”