Region’s business interests tout benefits of tax cuts
Proponents say cutting rates will spur the economy; critics say it will balloon the deficit
Businesses and the organizations that support them say tax reform is long overdue. Others worry the plan being worked on in the U.S. House will unnecessarily add to the federal government’s deficits.
“Vanguard strongly supports comprehensive tax reform efforts that promote economic growth, fiscal responsibility, and simplicity,” a statement issued by Chester County’s largest employer said. “By making our corporate and international systems simpler and more competitive, and preserving tax incentives to save for retirement, the current proposal could strengthen jobs and the economy which would benefit many hardworking Americans.”
The Chester County Chamber of Business & Industry also supports efforts to change the tax system.
“The current tax system is a disaster,” said Guy Ciarrocchi, president and CEO of the chamber. “It punishes success, forces corporate profits out of the U.S. and is designed to confuse and frustrate small businesses and families.
“The plan announced (last week) works to fix each of these problems: It cuts tax rates; encourages growth in American companies, and makes it easier for small businesses to succeed,” Ciarrocchi said. “A plan that is simpler, fairer and encourages growth earns our support. We will work tirelessly to help pass tax reform to meet these goals.”
Those opposed say the legislation would add $1.5 trillion to the national debt as it delivers a major tax cut to corporations and repeals the estate tax, which would benefit a tiny percentage of the wealthiest families in the country.
It would collapse today’s seven personal income tax brackets into four, nearly double the standard deduction used by people who don’t itemize, and increase the child tax credit, an element championed by Ivanka Trump.
As with most things in Washington, there’s strong disagreement on whether the tax plan being developed by Republicans and pushed by President Donald Trump is fair to everyone.
“We need to reform the tax code for the middle class and small businesses but the congressional Republican outline does the opposite, providing massive giveaways to the super rich and large corporations,” said Sen. Bob Casey, D-Pa. “Congressional Republicans should scrap this obscene plan and start over with a bipartisan process that raises incomes for the middle class and creates jobs.”
Pennsylvania’s other senator, Republican Pat Toomey, said business leaders have been telling him for years how much tax reform is needed.
“Since being elected to the Senate, I’ve repeatedly heard that our tax code is too complex, too burdensome and not competitive,” Toomey said. “We now have an amazing opportunity and responsibility to pass tax reform that will allow us to attain the growth we’ve been waiting so long to achieve. Pro-growth tax policies can make the United States a competitive place to do business and expand opportunity for all Americans.”
President Donald Trump and the Republicans are under pressure to show a tax bill as a major legislative accomplishment to protect their majorities in next year’s elections.
Democrats on the House’s taxwriting committee plan to propose a battery of revisions to the Republican tax overhaul bill that focus on middle-class concerns like childcare and home buying.
As the committee works on the legislation, an initial amendment proposed by Rep. Earl Blumenauer, D-Ore., would shut down the plan’s tax cuts if in two years the $20 trillion national debt had increased.
The amendments, without chance of approval by the Republican-dominated Ways and Means Committee, focus attention on the issue of whether the middle class would benefit from the tax plan.
One pro-business group that is not on board with the plan is the National Federation of Independent Business, or NFIB.
The group isn’t against a tax overhaul, it’s concerned the current plan doesn’t go far enough.
“This bill leaves too many small businesses behind,” said Juanita Duggan, president and CEO of the NFIB. “We are concerned that the pass-through provision does not help most small businesses. Small business is the engine of the economy. We believe that tax reform should provide substantial relief to all small businesses, so they can reinvest their money, grow, and create jobs.”
Senate Republicans aim to introduce companion legislation by Thursday and try to push a combined package through Congress and to Trump by Christmas.