Modernizing the tax code will provide a long-term boost to the American economy and to middle-class workers
By Jeffrey Kupfer
December 8, 2017
After months of fits and starts, it looks like comprehensive tax reform is nearing the goal line.
This would be an ideal holiday present for the American people, who have had to live with an outdated, onerous and inefficient tax system for far too long.
Last week the Senate passed its version of the Tax Cuts and Jobs Act. The House passed a different version earlier. Republican leaders in Congress are confident that they will be able to iron out the differences and send a bill passed by both houses to President Trump by the end of the year.
America now has the world’s highest statutory corporate tax rate – over 39 percent for combined federal and state, as compared to the current worldwide average of 25 percent.
According to research from Cato Institute Visiting Fellow Ike Brannon, a 10 percent decrease in the corporate tax rate would cause employment to rise by 2 percent to 4 percent and would result in a 5 percent increase in wages.
These increases are significant, tangible results for working families.
Turning back to this specific tax reform legislation, there are other benefits for middle-class taxpayers. It doubles the standard deduction, providing significant simplification. It also increases the child tax credit and lowers individual tax rates, thereby raising the take-home pay for the vast majority of taxpayers.
According to the nonpartisan Tax Policy Center, Americans of all household income brackets would get a tax cut in the first year.
Both common sense and economic research tell us that modernizing the tax code will provide a long-term boost to the American economy and to middle-class workers. Tax reform has come a long way down the field; it’s time to get into the end zone.