Blueprint for Pro-Growth Tax Reform Released
Last Friday, House Republicans released a blueprint for comprehensive tax reform as part of the GOP’s larger campaign reform agenda named “A Better Way.” While the provisions offered in this comprehensive tax reform proposal would reduce taxes and help jumpstart our economy, campaign ideas aren’t enough.
House Republicans should introduce and fight for real comprehensive tax reform now. That being said, this House Republican tax proposal, if enacted, would have a number of positive effects including:
- Simplify the tax code. Consolidates the current seven tax brackets to three and reduces the overall size of the tax code.
- Lower rates on individuals and businesses. Lowers the top individual tax rate from almost 40 percent to 33 percent and reduces the corporate tax rate from 35 percent to 20 percent. For small businesses filing as pass-through businesses, this proposal would lower their tax rates from 43.4 percent to 25 percent.
- Pro-growth/encourage savings and investment. Lowers the tax rate on capital gains and dividends from 23.8 percent to 16.5 percent and repeals the death tax entirely. Moves the U.S. from a worldwide system to a territorial system so international business can return their profit to the country without being double taxed. It would also allow businesses to expense or deduct the full cost of capital such as machinery, equipment, plants, and other productive assets.
While this tax reform proposal is not perfect, it represents a positive step toward pro-growth tax reform that will empower businesses to grow, increase employment opportunities, and allow Americans to save and invest more of their hard-earned money.