Washington, DC - "Congress needs to give President Trump a tax reform law he can sign. It's long overdue and the country needs it if we are to succeed in giving the American people - especially the middle class - the kind of economic security we've been missing for eight years now," Dan Weber, president of the Association of Mature American Citizens [AMAC], said in a statement issued today.
The fact is that there is widespread optimism that tax reform can become a reality in 2017 as long as lawmakers refrain from loading it up with a lot of self-serving elements. Most Democrats will not support a tax measure on principle but the GOP leadership expects that there will be some who will be on board.
"And, we shouldn't be put off by the so-called feud between the President and folks like Senate Majority Leader Mitch McConnell. In my opinion and the opinions of many others in the know, Congress and Mr. Trump are in sync when it comes to comprehensive tax relief for individuals and for the businesses that are the engine that drives job creation."
Perhaps Weber is right. According to McConnell: "This is our once-in-a-generation opportunity to fundamentally rethink our tax code and make it more efficient." McConnell also said that he was looking forward to working with the White House and House Speaker Paul Ryan on tax reform. As for Ryan, he put it this way: "It is more important for us than anything that we get tax reform done because we think it's absolutely critical for strong economic growth."
Weber said in his statement that, "the tax code has become too complex to do anything else than make life miserable for individuals and businesses. America has the third-highest corporate tax rate out of 188 countries-a fact that you won't hear Senate Minority Leader Chuck Schumer mention."
He explained that the IRS had a simple, straightforward purpose when the rules were established: to collect taxes in order that the government would have the money it needs to operate in behalf of the citizenry. "Over the years there's been a lot of tweaking, so much so that individuals dread the idea of having to file their individual tax returns. It's become a nightmare for those who try to go it alone and prepare their own tax returns and it's become a big financial burden for those who use an accountant. The current way we pay taxes is complicated, onerous and downright unfair."
As President Trump pointed out in his tax reform speech on Wednesday: "In 1935, the basic 1040 form that most people file had two simple pages of instructions. Today, that basic form has one hundred pages of instructions, and it's pretty complex stuff. The tax code is so complicated that more than 90 percent of Americans need professional help to do their own taxes."
The president said he is in favor of cutting the number of individual tax brackets from seven to three, and setting the rates at 10, 25 and 35 percent. Currently, middle class taxpayers can have a rate as high as 39.6 percent.
Mr. Trump also said he is in favor of cutting the corporate tax rate down to between 15 and 20 percent as a means of creating more higher paying jobs for American workers.
As for the impact the current tax code has had on business in the U.S., Weber said that it has had a far-reaching effect on American companies, "an impact that has stymied job creation. The United States has one of the highest corporate-tax rates in the world. Reducing taxes on companies would allow them to spend more on expanding their businesses. That means more jobs and higher paying jobs not to mention the fact that it would make them more competitive in the global marketplace.
"The current tax code gives multi-national American companies an incentive to keep their earnings offshore and that has deprived us of taxes on the profits they make in foreign countries," Weber pointed out.
The U.S. is one of the very few countries that practices double-taxation of overseas profits, he noted. "Is it any wonder, therefore, that our multi-nationals are loath to repatriate those funds - hundreds of billions and maybe even trillions of dollars that could be used to expand business here and create jobs."
According to attorney and financial columnist Frank Aquila, if the U.S. would get serious about repatriation and lower the corporate tax rate, it could be the most important economic stimulus this country has ever seen.
Weber said "It would mean multi-national companies would be able to invest more here at home in job creation and it would generate billions of dollars in additional tax revenue."