House Republicans say tax reform key to stronger growth, higher wages
As President Donald Trump traveled to Pennsylvania Wednesday to advocate for an overhaul of the nation’s tax code, several House Republicans voiced support for reforms that they say will make the tax system less onerous for businesses and individuals.
“The goal is by the end of the year to make it so you can file your taxes on a postcard,” said Rep. Alex Mooney, R-W.V.
In addition to reducing tax rates, the changes proposed by the White House and Republican leadership would eliminate most tax deductions, aside from charitable donations and mortgage interest. It would also approximately double the standard deductions.
If successful, it would amount to the biggest reform of the tax code since the 1980s.
While much of the framework for the reform bill released so far appeals to him, Rep. French Hill, R-Ark., was hesitant to fully endorse it before seeing the final product.
“I don’t really want to prejudge the mix or say one thing or the other things is going to cause me to vote no on it,” he said. “I want to see on balance how it works out for a typical family in Arkansas, how it works out for making America more competitive in the business tax arena.”
Under the plan, the corporate tax would fall to 20 percent and the profits of many small businesses that qualify as passthroughs would be taxed at 25 percent. The number of personal income tax brackets would be cut from seven to three.
“The purpose of the framework is to increase economic growth and wage growth, plus be simpler and better on the rate side for both business and for our families,” Hill said.
Democrats and many economic experts have alleged that the benefits of these changes would overwhelmingly go to the top earners, even though President Trump had claimed the rich would not pay less.
Some experts also estimate the tax cuts being proposed would add significantly to the federal deficit, something many Republicans have expressed concerns about doing in the past. However, the White House and its allies insist the economic growth spurred by the cuts would make up for it.
Many Senate Democrats say they will oppose any tax reform bill that reduces taxes for the wealthy, but Republicans have passed a budget resolution that allows them to push tax legislation through with a simple majority through reconciliation.
If a bill is drafted by the end of October, Hill is optimistic it can be passed before the end of the year. He views the reconciliation process as a “fallback” option in case Republicans cannot find enough “pro-growth Democrats who want to see faster economic growth.”
According to Rep. Markwayne Mullin, R-Okla., Americans’ money is better invested on a local level, rather than sending it off to the federal government.
“I’m all for cutting our taxes,” he said. “We have proven up in Washington D.C. we don’t do a good job of spending the money.”
In the past, efforts to fix loopholes in the tax code have often merely created new ones, but Mullin said the goal this time is to jettison the tens of thousands of pages of tax rules and regulations while allowing taxpayers to keep more of their own money.
“What we’re trying to do is get a simpler, flatter, fairer tax code,” he said.