Framework for Tax Reform
As I’ve said time and time again, our tax code is in desperate need of an update. Over the last 31 years, when our last comprehensive tax overhaul took place, our tax system has remained largely unchanged. Worse, it’s become so complex that it’s hard for many Americans to navigate. For example, there are over 12 different overlapping tax benefits related to education alone, which means families are tackling 100 pages of instructions to manage tuition costs. An overhaul in our tax code is necessary and crucial.
According to a survey conducted by the American Action Network (AAN), 73 percent of respondents believe that passing a comprehensive tax reform bill should be a ‘top’ priority for Congress – and I agree with them. This is a once-in-a-generation opportunity to allow hardworking Americans to keep more of their pay, and I am excited about this incredible opportunity. Other notable findings from the AAN survey include: 75 percent say the tax system has too many loopholes; 72 percent say it is too complex; and 67 percent say it is unfair to individuals. This clearly paints the urgent need for action.
With this in mind, House Republicans this week rolled out a framework for a major overhaul of our tax code that is a down payment on our promise to create jobs and grow our economy. We based our reforms on the four core principles President Trump outlined to reform our tax code: that we simplify tax filing and eliminate special-interest loopholes; that we encourage job creation and increased wages; that middle-income Americans receive tax relief; and that we encourage businesses to bring money back from overseas and invest it in the United States.
According to a report issued by the National Taxpayer Advocate, each year it takes families and businesses 6 billion hours to fill out their taxes. With the new tax reform framework, middle class families will be able to save time and money on their tax filings. House Republicans’ framework consolidates seven tax brackets into three of 12 percent, 25 percent and 35 percent, and also provides relief by doubling the standard deduction. By simplifying the forms necessary for an average American family to file their taxes to the size of a postcard, filing will occur much more efficiently and effectively. This framework will also assist retirement plan participation among workers and create more resources to help Americans save for retirement.
To encourage job creation, the plan has significant business tax relief. Small and family-owned businesses are the cornerstone of our economy, and this plan will limit their maximum tax rate to 25. Right now, America has the highest corporate tax rate in the world for industrialized nations, which is why under this framework our corporate tax rate will be lowered to 20%, putting America’s corporate tax rate below the average of other industrialized countries to encourage greater investment in American manufacturing.
By simplifying the way taxes are collected through consolidated brackets, repealing the Death Tax, and eliminating loopholes primarily used by the wealthy, middle-class Americans will be able to keep more of the money they earn and in turn provide for their families. I look forward to working with the Trump administration and my colleagues in Congress to keep our promise to deliver long-awaited tax relief that will greatly benefit East Tennesseans.As always, feel free to contact my office if I can be of assistance to you or your family.