An America First Tax Plan
American families and businesses can’t wait any longer for tax reform.
The federal tax code has become outdated and inefficient in the 30 years since the last comprehensive reform. Americans spend billions of hours each year just completing their returns.
The urgent need for reform is made clear by the huge number of voters who are upset with the current system.
Sixty-eight percent of Americans are dissatisfied with the current tax system, according to a poll commissioned by America First Policies in late September.
Thankfully, President Trump has made tax reform a key priority of his administration. This comes off his electoral mandate to pass comprehensive reform that puts American families and businesses first.
Along with the “Big Six” group of top lawmakers and economic advisers, the president recently released his outline for reforming our tax system. This plan is poised to deliver relief to American companies and working- and middle-class families once enacted.
"My plan is for the working people, and I think very, very strongly, there's very little benefit [in it] for people of wealth." President Trump noted during a briefing with reporters.
To that end, the president’s tax plan will double the standard-deduction for the middle class while eliminating taxes that hurt American families. Lower tax rates on small and large businesses will also spur job growth.
The administration has yet to release all the details of the plan, but the overall structure will follow an outline that could restart our economy and provide prosperity for all Americans.
Predictably, however, liberal analysts and members of the Democratic Party have made it a top priority to stop this plan before it reaches the drafting phase.
This prejudged opposition to the plan can be seen in the recently released report by the Tax Policy Center, a joint venture between the left-leaning Brookings Institution and Urban Institute.
This egregious report was rightfully attacked by a range of policy experts and members of the president’s cabinet as containing fallacies and poor analysis.
Kevin Hassett, chairman of the Council of Economic Advisers, lambasted the report as containing “many fictions” and “scientifically indefensible” conclusions during a speaking engagement at the Tax Policy Center’s headquarters.
As Hassett indicated in his remarks, a deeper dive into the details of the president’s tax plan reveals that it is in no way a handout to the wealthy.
For starters, the plan calls for the elimination of the Alternative Minimum Tax (AMT). The AMT which was originally targeted for high-income earners, now disproportionately hurts middle-class families by increasing their tax burden.
The Trump tax plan also aims to double the standard deduction to $12,000 for individuals and $24,000 for families.
Approximately 70% of taxpayers don’t itemize on their tax returns and opt for the standard deduction. This boost will give middle- and working-class families much-needed tax relief.
Small businesses and employees can also expect big gains from the plan. The president and his team have proposed cutting the corporate tax rate from 35% to 20%.
This deep cut could help grow the economy by an estimated 7% over the coming decade. As businesses grow, wages will increase and new jobs will be created.
And with a new corporate rate comparable to the rest of the developed world, American firms will be more likely to bring back the trillions of dollars that are sitting overseas and invest them in American jobs.
With so much potential riding on this tax-reform proposal, Republicans can’t give up on this issue. The president and his team delivered a promising outline, and now it’s time for Congress to do their part.
Democrats will continue to lay fire and make false accusations against the plan, but the congressional Republicans must remain determined.
Now more than ever American families and businesses need relief, and we have a once in a lifetime opportunity to make it happen.
-- Alex Titus, Fellow at America First Policies