President Trump has introduced a sweeping tax reform plan, emphasizing a full overhaul that drastically slashes taxes for individuals and businesses in what’s promised to be the largest and most significant tax cut in American history. The American Conservative Union Foundation (ACUF) applauds the focus of the President, his administration, and Republican leadership on the need for immediate tax relief and acknowledge this as a significant first step forward toward unshackling the economy. In order to achieve meaningful reform for all Americans, any plan implemented must adhere to two core principles that will put money back into the hands of all taxpayers and businesses of all sizes:
- Reduce effective tax rates – Any tax package should ensure that the effective tax rates for all taxpaying individuals and businesses are reduced.
- “Paying for” tax cuts does not stimulate the economy. –Our priority must be on deep and significant cuts that will make a substantial impact on our economy. Our focus today must be on reducing the tax burden so that we can unshackle the economy. We can then later figure out how to make our tax structure permanent. When politicians talk about paying for tax cuts without reducing spending, what they really mean is shifting the tax burden on to the shoulders of others. That shell game will not improve the economy and will not promote job creation.
President Trump’s proposed tax framework focuses predominantly on a pro-growth model that includes many of these principles, cutting taxes and creating a robust job market and workforce. The plan proposes to dramatically reduce corporate and individual rates while eliminating the estate tax, the AMT, and the state and local tax deduction, which will help prevent the continued subsidization of states addicted to tax increases. It also reduces the amount of tax brackets, slimming them down from seven to four (0%, 12%, 25%, and 35%).
The projected 20% corporate tax rate is a promising step in the right direction but can only be an effective tool in revitalizing our economy if we are diligent in blocking additional tax ploys that would clog economic growth and force these rates to remain stagnant.
The ACUF believes President Trump’s simplified tax code is best for American families, businesses and individuals and will contribute significantly to revitalizing our economy in the long run. Finally, it is imperative that all GOP Members of Congress unite in order to pass a budget that will guarantee the largest tax cut in history for all taxpayers so that we can continue to protect and preserve American freedoms.