Jenny Beth’s Journal: The GOP’s tax reform proposal is just what America needs
President Trump and Republicans in Congress released a tax reform framework that experts say will simplify the system, lower Americans’ taxes and generate significant economic growth. How could one proposal accomplish so many important things?
On the corporate side, it proposes to slash the rate from 35 percent to 20 percent, which would, overnight, make the U.S. a more attractive place for business investment from both home and abroad.
And the plan proposes to cut the rate on so-called “pass through” income – the income generated by small businesses that file via their owners’ personal returns – from 39.6 percent down to 25 percent. Given that, according to the Small Business Administration, small businesses generate 64 percent of the new jobs in this country, and are responsible for 49 percent of private-sector employment, this will help unleash the kind of job growth we have not seen in a decade or more.
On the individual side, it shrinks the current seven brackets to just three, and it reduces the top marginal rate from 39.6 percent to 35 percent – though it leaves open the possibility of a fourth bracket for those on the uppermost end of the upper end.
Further, the plan proposes elimination of the death tax, the alternative minimum tax, and the generation-skipping transfer tax.
As in any tax reform proposal, the general idea is simple: eliminate or reduce the value of individual deductions (loopholes) so you can subject more income to taxation, matched against lower rates.
An initial analysis by the Committee for a Responsible Federal Budget projects that over a decade, the plan would generate $5.8 trillion in tax cuts, against $3.6 trillion in new revenues flowing in as a result of eliminating or reducing deductions and broadening the tax base, thereby yielding a net $2.2 trillion tax cut.
The tax reform framework looks like a proposal that will give America what it needs: a tax system that is simpler, flatter and fairer. Hardworking Americans need a tax code that provides tax cuts for ALL. Click here to help us push hard for its enactment and provide taxpayers with the long-overdue relief that they deserve!