by John Steinberger | September 1, 2017 7:05 pm
President Donald Trump traveled to Springfield, Missouri Wednesday to promote his tax relief plan, which has a focus on reducing income tax rates for middle income Americans, small businesses and corporations. He presented his plan at a Springfield manufacturing plant, highlighting his America First theme and Made in the USA products.
Trump told the Springfield audience, “We’re here today to launch our plans to bring back Main Street by reducing the crushing tax burdens on our companies and our workers. Our self-destructive tax code costs Americans millions of jobs, trillions of dollars, and billions of hours spent on compliance and paperwork.” He emphasized that the proposed tax changes would boost take-home pay for the workers.
America’s 35% corporate income tax rate is the highest among the world’s 30 most advanced economies (the average rate is 24%). Trump proposes lowering that rate to 15% and applying the same rate to small businesses, some of which currently pay a 40% federal income tax rate plus state income taxes. He describes this as a “once-in-a-generation opportunity to deliver real tax reform.” Trump pointed to the Missouri members of Congress at the event and said, “I don’t want to be disappointed by Congress. Do you understand that?” It was a reference to Congress failing to agree on a repeal of the financially stressed health care system earlier in 2017.
Trump described how trillions in American corporate investments are kept overseas because we are the only country which taxes overseas profits when they are returned home. He expressed the need for America to level the playing field with our overseas competition.
The projected individual income tax rates were not revealed at the Springfield speech. Trump economic advisors have hinted that middle income taxpayers will get the largest rate reductions and that higher-income Americans will get slightly lower rates offset by fewer deductions. The plan will increase the standard deduction for individuals from $6000 to $12,000 and the family deduction from $12,000 to $24,000. That means that a family with $64,000 in gross income would only have $40,000 in taxable income, minus other deductions such as mortgage interest payments and charitable contributions. Trump said his plan will add a child care deduction for middle income households advocated by his daughter Ivanka.
Congress returns to Washington Sept. 5 and will have to introduce its version of tax reform. Its first order of business for Congress will be to fund the budget for the fiscal year which begins on Oct. 1. President Trump is expected to barnstorm the country in support of his tax plan, focusing on the 10 states he won in 2016 which are now held by Democrats who are up for re-election in 2018. He called out Democrat Senator Claire McCaskill Wednesday, saying that if she didn’t support his tax plan, the people will need to vote her out. Trump won Missouri by more than 10 points.
John Steinberger is a Navy veteran, the former Chairman of the Charleston County Republican Party, and involved in several national political causes.
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