Upon return to Washington this month, Congress seems to upping their game on tax reform, but they have a long way to go. This month, the Senate Finance Committee held hearings on the need for tax reform for businesses and individuals. Tomorrow at their retreat, the Congressional leaders are expected to release the details of their tax reform plan that should set the stage for legislation.
Reports are indicating that the tax reform plan agreed upon by the so-called “Big Six,” including administration officials and Congressional leaders, will lower the corporate tax rate from 35 percent to 20 percent, close loopholes, and simplify the code by consolidating tax brackets. As the U.S. has the highest corporate tax rate in the industrialized world, setting a competitive corporate rate with the rest of the world is a critical piece to tax reform in order for American businesses of all sizes to grow, compete, invest, and create more jobs for Americans.
According to a new study, tax reform that sets a fair business rate—like the rates being considered by Congressional leaders and the Administration – could boost jobs by 10-15 percent and wages by 15-20 percent.
While the steps Congress is taking this month are encouraging, tax reform cannot be achieved this year without passing their 2018 budget first, and they’re up against a ticking clock. As tax writing committee chairman, Kevin Brady stated this week, “Without a budget, there’s no tax reform — once that’s completed, Ways and Means will bring out the comprehensive bill.” If they can get a budget passed quickly, Congress will then have to swiftly and efficiently come to consensus on draft tax reform legislation for a vote before they run out of working days at the Capitol.
We’re still hopeful Congress keeps their eye on the tax reform ball, as American businesses and taxpayers are depending on action. According to a recent poll released by the American Action Network this week, 7 in 10 Americans say passing tax reform should be a top priority or an important priority for Congress.
As David Williams of the Taxpayers Protection Alliance recently opined,
“When it comes to tax reform, failure is not an option. So Congress: Pass a budget, draft a broad tax reform bill and make sure enough members get to “yes” to pass it — and do it before the year ends. That’s what the nation voted for, and we all expect nothing less.”
We couldn’t agree more!