November 02, 2017
This is the tax-cut plan America needs
House Republicans just released a tax-cut plan that meets the nation’s needs — and in a less bitterly partisan world would win major Democratic support.
It offers the relief for business and the middle class needed to get the economy roaring, while arguably increasing the progressivity of the individual tax code.
Start with the move to cut the corporate rate from 35 percent to a globally competitive 20 percent, along with a “holiday” to let companies bring home the trillions in profits now stranded overseas at a one-time low rate.
One goal is to stop businesses from taking their operations — and jobs and taxes — abroad in search of lower rates, as has become all too common. But the larger aim is to boost business investment, allowing for pay hikes and job-creation on the larger scale that Americans used to expect.
Washington’s hostility to business (in the tax code and otherwise) explains why the nation never saw a single Obama year with 3 percent growth or more, a first for any modern president. Ending that punitive approach is the only way to get a serious boom.
Many companies that aren’t incorporated would see relief, too, thanks to rules that let (non-service-sector) firms qualify for lower rates on “pass-through” income.
There are goodies for middle-income taxpayers, too. For example, the lowest bracket, with a rate of 12 percent, has an upper limit higher than the current 10 percent and 15 percent brackets. So many middle-income taxpayers would see their rates drop.
Meanwhile, some higher earners who now pay a top rate of 33 percent may find themselves in the slightly higher 35 percent bracket. Progressives should love that.
The bill even has a “millionaires’ tax” — a fourth bracket on super-high incomes.
As E.J. McMahon notes, the plan presents big challenges for New York by ending write-offs for state and local income taxes and limiting the mortgage-interest and property-tax deductions.
That will hit Empire State high-end earners hard — but only because it ends the federal habit of shielding the rich from their states’ taxes. New York politicians will have to rethink their high-tax, high-spend ways.
The aim is to pass the biggest shake-up to the code since the Reagan reforms by year’s end. As President Trump says, that would be a “big, beautiful Christmas present.”
President Trump Will Fix It!
Tax Reform Brings Much-Needed Relief to Everyday Americans