Trump and Republicans have to make the tax code great again
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President Trump has taken significant actions in his first seven months in office to remove the layers of burdensome regulation that restrict energy affordability and reliability in the United States. Acknowledging the importance of the U.S. energy industry to economic growth and jobs, the president has championed achieving “energy dominance,” bringing a refreshingly different vision to energy and the environment policy than his predecessor.

The administration's efforts to boost exports of American energy resources to a global market and expand development here at home will create more affordable and reliable energy. Significant changes include expediting the permitting and approval processes of liquid natural gas terminals and exports, as well as expanding policies that allow offshore oil and gas drilling.

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“This is only the beginning,” the president said in a speech earlier this year that promised the “golden era of American energy.” This exciting new future should not stop with energy policy. President Trump has a historic opportunity to extend this vision of economic dominance to another important policy area: our broken federal tax code.

 

Today’s tax code undermines U.S. competitiveness on the domestic and the global fronts, denying hardworking Americans higher wages, better jobs, and more opportunities for their families. Just as President Trump has called for "a complete review" of major areas of U.S. energy policy, so should he review and reform U.S. tax policy.

With a tax environment as hostile to investment as ours, it's no wonder why American companies keep trillions in profits overseas and move their headquarters and jobs beyond our borders. Bringing down the corporate income tax rate — which is currently the highest in the developed world, at a top marginal rate of 35 percent — would cut at the heart of the problem.

Switching to a territorial system, as opposed to our current worldwide one, would mean that companies would not be taxed twice on repatriated earnings or face other penalties for having headquarters in the United States. Thankfully, tax reform talks are on the right track in Washington.

The Trump administration unveiled a tax reform vision earlier this year that addresses many of these problems by lowering rates, reducing complexity and igniting economic growth. Other high-level details include repealing the death tax, increasing the standard deduction to $24,000, and getting rid of loopholes that benefit politically-connected special interests at the expense of everyday families. Tax writers in Congress are translating these concepts into legislative text over August recess and lawmakers will consider these bills in committee after they return.

The consensus among conservatives in Washington to accomplishing tax reform is fierce. The recent joint statement from the “Big Six” — Treasury Secretary Steve Mnuchin, National Economic Council Director Gary Cohn, House Speaker Paul RyanPaul Davis RyanOcasio-Cortez top aide emerges as lightning rod amid Democratic feud Juan Williams: GOP in a panic over Mueller House Republicans dismissive of Paul Ryan's take on Trump MORE (R-Wis.), Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellMcConnell: Trump 'on to something' with attacks on Dem congresswomen Dems open to killing filibuster in next Congress Senate passes bill making hacking voting systems a federal crime MORE (R-Ky.), Ways and Means Chairman Kevin BradyKevin Patrick BradyBlue states sue Treasury, IRS over rules blocking Trump tax law workarounds Manufacturers group lobbies Congress for new North America trade deal Lawmakers join Nats Park fundraiser for DC kids charity MORE (R-Texas) and Finance Chairman Orrin HatchOrrin Grant HatchTrump to award racing legend Roger Penske with Presidential Medal of Freedom Trump awards Presidential Medal of Freedom to economist, former Reagan adviser Arthur Laffer Second ex-Senate staffer charged in aiding doxxing of GOP senators MORE (R-Utah) — signaled strong commitment to a shared vision. The decision to drop the border adjustment tax from future plans was a wise move to drive consensus.

President Trump and both political parties in Congress should not squander this historic opportunity to bring dominance to the tax code and make it work better for American families and industries. Policymakers face a number of deadlines in September, such as negotiations on lifting the debt ceiling and funding the government, but they should not let these slow their momentum behind getting tax reform done.

Christine Harbin is vice president of external affairs at Americans for Prosperity.


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