The last time America passed major tax reforms was 31 years ago when President Reagan signed the 1986 Tax Reform Act into law.
In the 31 years that followed — all the good of the tax reforms of 1986 has now been outweighed by the bad as times and conditions have changed. Since 1986, the tax code went from 30,000 pages to now over 70,000 pages. The IRS Tax Code is out of control and burdens the taxpayer with confusion, expense, and litigation.
Since 1986, U.S. corporate tax rates went from being competitive with other countries to the highest in the developed world. We have stifled our competiveness. And, individual tax rates are too high with too many categories, deductions, and loopholes.
So, it is time now for meaningful, fair, equitable and major tax reforms that make the tax code simpler, corporate rates competitive, and individual tax rates and deductions fairer.
Today, President Trump unveiled a major tax overhaul that makes sense.
With regard to the tax code: The plan is to revamp the tax code from top to bottom to reduce confusion, bureaucracy, costs, and litigation. A simpler, fairer, and more understandable tax code will benefit everyone except perhaps accountants and lawyers who make a living on it.
Here are some of the highlights:
The Trump tax plan reduces seven individual tax brackets to just four and increases the standard deduction. The new rates would be 12 percent, 25 percent, and 35 percent and the standard deduction will be $12,000 for an individual and $24,000 for married couples. This allows for individuals to save in the amounts they will pay to the federal government and what they can deduct. In addition, taxpayers will be eligible for a larger child tax credit, which will allow relief for childcare for working parents. All these reforms mean more money for the middle class.
Our corporate tax rates are not competitive with the rest of the world. So, the Trump plan seeks to reduce corporate tax rates from close to 40 percent to 20 percent. This alone will be a huge incentive for companies to come to America and stay in America by creating an environment of investment. In addition, the Trump plan seeks to repatriate off shore corporate profits so once a company earns profits overseas, they can bring those profits back to the U.S. without incurring additional taxes. That should bring trillions of dollars back home.
An overhaul of America’s tax system is long overdo and necessary to stay competitive at home and aboard and will unleash the power of the velocity of money in the hands of the private sector.
Republicans believe that it is more beneficial for our economy for money to be invested in the private sector instead of sending hard earned money to the government to spend as it sees fit. Every time a dollar changes hands among the people is what will drive our economy. Government needs to spend less and people need to invest more.
President Trump’s tax plan is smart and timely. It is not how well Wall Street is doing it is how well Main Street is doing. These reforms will be a tremendous boost to the middle class.
It is time for a major overhaul of the U.S. Tax Code as well as tax rates, deductions, and loopholes.
What our economy needs more than anything is fairness and certainty. This plan will bring that.
Bradley Blakeman was a member of President George W. Bush's senior White House staff from 2001 to 2004. He is also a frequent contributor to Fox News and Fox Business Channel. He currently is a Principal with the 1600group.com a consulting company. To read more of his reports — Click Here Now.
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