Trump’s conservative majority depends on tax reform in 2017

Trump’s conservative majority depends on tax reform in 2017
© Greg Nash

Over the next 90 days, President Trump has an opportunity to reorient back to a central pledge from his campaign: replacing the rigged, businesses-as-usual agenda with an “America first” agenda.

The first step toward returning to this mantra should be passing bold tax reform that grows the economy and makes the code simpler and fairer.

American families feel left behind after eight years of progressive policies from the prior administration. President Trump rode this wave of unrest to the White House with a mandate to unrig Washington policies and make them work better for ordinary Americans. 

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Tax reform is the perfect policy to kick-start this turnaround – consensus is uniquely fierce among conservatives — from the grassroots level to Washington. The joint statement released last month by the so-called "Big 6" — Treasury Secretary Steve Mnuchin, National Economic Council Director Gary Cohn, House Speaker Paul RyanPaul Davis RyanOusted House chaplain: Ryan told me to ‘stay out of politics’ Overnight Finance: House chairman eases demands on Dodd-Frank rollback | White House economist dismisses trade war fears | Unemployment claims at 48-year low | State AGs want new hearing on Obama financial adviser rule Conservative leader: Next House chaplain should have a family MORE (R-Wis.), Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellDems hold double-digit lead on generic ballot: poll Senate confirms Pompeo as Trump's new secretary of State The Hill's 12:30 Report MORE (R-Ky.), Ways and Means Chairman Kevin BradyKevin Patrick BradyConservatives eye new tax cut for capital gains Former Bush adviser joining Ways and Means Committee in key staff role Some doubt McCarthy or Scalise will ever lead House GOP MORE (R-Texas), and Finance Chairman Orrin HatchOrrin Grant HatchOvernight Finance: House chairman eases demands on Dodd-Frank rollback | White House economist dismisses trade war fears | Unemployment claims at 48-year low | State AGs want new hearing on Obama financial adviser rule Overnight Cybersecurity: DHS chief eyes new ways to bolster cyber workforce | Dems grill Diamond and Silk | Senate panel approves bill to protect Mueller | Two-thirds of agencies using email fraud tool Key GOP chairman praises Trump's IRS nominee following meeting MORE (R-Utah) — is a strong show of Washington's commitment.

 

From the grassroots level, at least 88 conservative groups across the country — including both of our organizations — have gone on record for the need for conservative tax reform in 2017. 

With the 2018 midterm elections in sight, Americans care more about real results than any of the stories coming from the establishment media and the 24-hour news cycle.

An America-first tax reform plan means unrigging the code so it works for families and small businesses instead of well-connected special interests. It means implementing policies that do not stand in the way of American innovation and allowing the economy to flourish. And it means giving hardworking taxpayers a raise through less top-down command and control.

Most importantly, tax reform must be beneficial for families. 

The code is so complex that it is difficult, if not impossible, for the typical American family to file their own tax return. While it was just 26,000 pages in 1986, today the code is almost three times that size. 

Families and businesses are forced to spend more than 8.9 billion hours and $400 billion complying with the code every year, according to an analysis by the Tax Foundation. More than 80 million individuals and families rely on a paid preparer to file their taxes, according to IRS data.

This complexity must be addressed by eliminating the many confusing and convoluted provisions in the code; rates can then be cut so all Americans keep more of their income.

While the government continues to take too much from hard-working Americans, families have also seen their wages remain stagnant.

Over the past decade, the economy has struggled at just two percent growth – the worst recovery of the modern era. The lackluster recovery has cost families an average of $8,600 per year, according to the Joint Economic Committee. According to the Congressional Budget Office, the economy will continue to stagnate at two percent, unless pro-growth policies are implemented.

Tax reform must lower the tax rate on businesses to a globally competitive rate. Currently, corporations face a federal rate of 35 percent, while small businesses face a top rate as high as 44.6 percent. By comparison, the average businesses in the developed world faces a tax rate of less than 24 percent, even after including state and local taxes.

Competitive tax rates for businesses will allow American ingenuity and innovation to flourish and will help unleash economic growth. Those lower rates should be coupled with elimination of carveouts for special interests.

If Trump and Congress can ensure that the final bill fixes the code for families and businesses, they will have a bold “America first” victory that could turn around the economy and give families a raise.

President Trump and Republicans in Congress have a historic opportunity to fix the tax code. They should not waste this opportunity. Our organizations look forward to partnering with Washington policymakers in advancing this shared goal.

Christine Harbin (@ChrissyHarbin) is vice president of external affairs at Americans for Prosperity. Alex Hendrie is director of tax policy at Americans for Tax Reform (@TaxReformer).