The Business Council of Alabama has joined more than 240 like-minded organizations in urging Congress to expeditiously pass a budget resolution with reconciliation instructions so that the promise of tax reform can be made a reality.
In the 31 years since Congress last reformed the U.S. tax code, it has become an anchor weighing down the economy, job creation, and wage growth for American families. “This Congress has a once-in-a-generation opportunity to fix the problem,” the BCA-signed letter states.
The U.S. Chamber of Commerce on Wednesday urged Congress to quickly address tax reform to give business relief.
“The single-most important next step is for Congress to adopt a budget resolution with reconciliation instructions that will permit tax reform to move forward without the threat of a Filibuster,” the letter states. “But failing to pass a budget resolution now may mean that tax reform never moves forward. That outcome is unacceptable to all of us and ought to be unacceptable to every Member of Congress who has advocated for reform.”
Congress has already prepared for tax reform, as is President Trump (see following story). The House has produced a comprehensive plan and last year House Republicans released a blueprint for reform. The Senate Finance Committee convened bi-partisan working groups that tackled all the major aspects of reform.
“While much work remains to be done, we believe Congress is well-positioned to move forward with comprehensive, pro-growth tax reform,” the letter states. “Just like Members of Congress, each of our organizations will continue to advocate for specific priorities within tax reform as the relevant committees and ultimately the full House and Senate consider tax reform legislation.”
TAX CODE NOW ON TRUMP’S RADAR
President Donald Trump today speaking to the National Association of Manufacturers board of directors linked tax reform with continued economic progress that has seen record levels.
“It will be rocket fuel for our economy,” Trump said of his tax plan. “We have to reduce taxes on businesses that make in America.”
NAM President and CEO Jay Timmons, accompanied by NAM Chairman David Farr, who is chairman and CEO of Emerson in St. Louis, introduced Trump as a “true champion of our industry.” (Farr testified on tax reform before a House committee in May.)
“This is manufacturing’s moment,” Timmons said. “Manufacturers in American have never been as optimistic about future as they are this year. Our survey shows members believe future is bright. Almost 90 percent reported positive outlook for their companies.
“Today’s tax code lets other countries win and our workers and their families pay the price,” Timmons said.
“America is finally back on the right track,” Trump said. “We have to transform America’s outdated and burdensome tax code … a burden on our country. When our workers have a level playing field, no one, absolutely no one can beat us.”
A Republican plan to overhaul the U.S. tax code proposes to sharply reduce tax rates on businesses and many individuals, kicking off an effort by President Trump and congressional leaders to build momentum for a challenging legislative push in the months ahead, The Wall Street Journal (subscription) reports.
The plan doesn’t reduce government spending but calls for a 20 percent corporate tax rate, down from 35 percent. The plan would reduce the tax rate for business owners who report business income on their individual tax returns from the top rate of 39.6 percent to 25 percent.
Individual tax rates would be 12 percent, 25 percent, and 35 percent. The plan would repeal the estate tax and provide a one-time tax on domestic companies’ stockpiled foreign earnings, the Journal wrote. The plan seeks to simplify the tax system and repeal the alternative minimum tax and nearly double the standard deduction to $12,000 for individuals and $24,000 for married couples. Personal exemptions would be repealed.
The plan calls for limits on corporations’ ability to deduct interest and for repeal of the state and local tax deduction for individuals. President Trump has favored a 15 percent corporate tax rate but now wants a 20 percent rate as long as the plan includes a middle-class tax cut. The plan would eliminate most itemized deductions, with the exception of mortgage interest and charitable donations, a factor that could increase the use of the standard deduction.
Meanwhile, Senate Finance Chairman Orrin Hatch, R-Utah, is promoting a way to meet President Trump’s goal of reducing the corporate tax rate to 15 percent by allowing companies to deduct shareholder dividends from their profits. Trump said the tax plan will help make American businesses more competitive.
“President Trump has been a tireless advocate for manufacturers and we are honored to have him address industry leaders on the critical need for bold tax reform,” Timmons said in a statement. “Manufacturers in America have never been as enthusiastic or as optimistic about their future as they are this year, and that is because of the huge opportunity we have to get tax reform done.”
NO VOTE ON DISMANTLING OBAMA CARE IN SENATE THIS WEEK
Republicans wanted to dismantle Affordable Care Act but defections within the ranks basically killed that idea. Senate Majority Leader Mitch McConnell’s decision not to bring the legislation up for a vote on the floor marked the latest chapter, perhaps a final one, that will kill any repeal of the unpopular and expansive national health insurance plan passed by Democrats in 2010.
Republicans who control the Congress and White House insist the goal of overhauling or killing President Obama’s health insurance law that faces 15 percent premium increases next year is not dead, but it isn’t going to get in the way of rewriting the tax code.
“We haven’t given up on changing the American health-care system,” McConnell, R-Ky., said. “We’re not going to be able to do it this week.” But for the moment, he said, “we plan to move forward on our next priority, which is reforming the American tax code in significant ways for the first time in 30 years.”
GOP leaders face the challenge of explaining to their voters the failure to repeal the ACA after seven years of promising to do so, the Wall Street Journal reported. They also face increased pressure to deliver on the tax-code rewrite, now seen as Republicans’ last shot at bagging a major legislative victory before the 2018 midterm elections.
The question becomes does the White House have the leadership to push the tax rewrite?