New life for Republican tax reform
House Speaker Paul Ryan touts the tax plan that will get America moving again
House Speaker Paul Ryan’s uplifting economic speech this week has breathed new life into the GOP’s tax reform plan to get America moving again. In a time when the news out of the nation’s capital has been largely focused on multiple investigations into the Trump administration and Russia’ s cy ber skull dug gery in last year’ selection, Mr. Ryan reminded us that Congress was also focused on the issues that matter most to a majority of Americans: the economy, jobs and incomes.
In a hard-hitting, nationally televised address to the National Association of Manufacturers on Tuesday, Mr. Ryan laid out the nuts and bolts details in the Republicans’ ambitious tax cut plan.
“First, we will eliminate harmful, burdensome taxes, including the death tax and Alternative Minimum Tax,” Mr. Ryan said.
Then, Republican lawmakers intend to “consolidate the existing seven [tax] brackets into three, double the standard deduction, and simplify things to the point that you can do your taxes on a form the size of a postcard,” he said.
And to insure these tax cuts are paid for in order to produce a “revenue neutral” tax reform package, “clear out special interest carve outs and excessive deductions,” and other needless tax breaks known as “corporate welfare.”
But without touching deductions for home ownership, charitable giving, and retirement savings.
“And finally — and most importantly — we will use the savings from eliminating these loopholes to lower tax rates,” Mr. Ryan explained.
What this is all about is “jobs, jobs, jobs. Good, highpaying jobs,” the Wisconsin lawmaker said.
After examining the Republican tax plan, the nonpartisan Tax Foundation estimated that “our blueprint would create 1.7 million new full-time jobs,” he said.
Business tax rates will be cut, too, but Mr. Ryan went to great lengths to explain that the people who would most benefit from this are mostly ordinary, individual taxpayers.
“Most people do not realize this, but here in America, 8 out of 10 businesses file their taxes as individuals. In fact, most of our jobs come from these new and small businesses,” he said.
But “under our crazy system, successful small businesses pay a top marginal tax rate of 44.6 percent,” a punitive levy that robs single owner firms of the capital it needs to expand, hire more workers and raise salaries.
Meantime, the U.S. corporate tax rate is 35 percent, when the average rate in the industrialized world is 22.5 percent. “How can we compete like that?” Mr. Ryan asked. “We can’t.”
Little wonder, then, that the U.S. tax code is sending U.S. manufacturing operations overseas where the tax rates are less. “This makes no sense, and it is costing us jobs.”
Another part of the GOP’s tax reform plan would bring money earned abroad back to the U.S. to be invested here.
Under our present tax system, when U.S. firms earn money overseas, it is taxed in that country. But it the firm brings that capital home, it will be taxed again here.
“Almost no other country does this,” Mr. Ryan says. “It is literally stranding trillions of dollars that could come into our economy. We have to fix this. And we will.”
But the question that looms large in Congress is when? A number of maddening factors have collaborated to block action on tax reform.
Health care reform has dominated Congress’ attention for the past five months, along with an unending number of high level hearings into the Russian meddling scandal that has left little room in the congressional calendar.
To say that President Trump has been distracted by the special counsel’s investigation into his role in the widening investigation is putting it mildly.
In 1981, when President Reagan was lobbying for his across the board income tax cuts in the Democraticrun House, to end Jimmy Carter’s recession, he campaigned from one end of the country to the other, asking Americans to write their lawmakers to pass his economic program.
Letters poured into Congress favoring the tax cuts, and Democrats like Texas Rep. Phil Gramm were helping the White House. In the end, Democratic House Speaker Tip O’Neill threw up his hands and surrendered.
But Mr. Trump, preoccupied by his own troubles and sharply declining poll numbers, has done relatively little to help Ryan pass the GOP’s tax plan.
Republican leaders insist that it will pass later this year, but others are not so sure.
There “is no guarantee that the tax reform will get done this year, as Ryan promised,” the Business Insider website reported this week, “and many analysts remain skeptical.”
Under our crazy system, successful small businesses pay a top marginal tax rate of 44.6 percent, a punitive levy that robs single owner firms of the capital it needs to expand, hire more workers and raise salaries.