Op-Ed from US Senator Roger Wicker:
More money for middle-class Americans. That is the goal of tax reform and the reason I support it in the Senate. More than 30 years after Congress last rewrote the tax code, I believe we are seizing an opportunity to make history. Now that the budget has passed, the policy details of tax reform will take shape in the coming weeks.
A 21st-century economy needs a 21st-century tax system. President Trump and congressional Republicans have worked together to put forward pro-growth ideas that look out for American workers and American businesses. These ideas stem from the belief that Americans can make better decisions about their money than the federal government. I agree.
Like any tough policy issue, there have been outspoken critics of this tax reform effort. They have used misguided speculation and guesswork to make dire predictions. However, these naysayers should not derail the pursuit of substantial tax relief for American families. Nor should they stand in the way of a burgeoning economic boon, fueled by policies that will promote U.S. competitiveness. Millions of U.S. jobs and trillions of dollars in economic output could be generated. After a decade of lackluster economic growth, that is the kind of news we need to hear.
For years, lawmakers from both political parties have acknowledged that our tax code is outdated and complicated. The difference now is that President Trump and a Republican-led Congress are ready to fix it, refusing to kick the can down the road any longer.
What would an updated tax code mean for working Americans? Under the proposed framework, the standard deduction would be doubled and tax brackets would be simplified. There would still be popular tax provisions — including an expansion of the Child Tax Credit — but not the unfair smorgasbord of special deductions. U.S. businesses — big and small — would see lower tax bills, freeing up funds for capital investment, higher wages and job creation.
For the past eight years, Americans have struggled to budget higher living expenses, including a rise in health care premiums, while seeing little to no growth in their paychecks. The nation’s real median wage growth has limped along, rising on average by only sixth-tenths of a percentage point annually for almost a decade. In a new analysis, the White House’s Council of Economic Advisors highlights the difference that a competitive corporate tax rate could make on the wages of American workers. The council predicts that cutting the corporate tax rate from 35 percent to 20 percent could boost average household incomes by $4,000.
This reduction in the corporate tax rate would hardly be a radical move. The United States currently has the highest corporate tax rate in the world — which has the unintended consequences of encouraging U.S. companies to look overseas when deciding to expand and discouraging global industry from looking to the United States to invest. That discourages new job opportunities here at home.
The work done by the Senate Budget Committee, the Senate Finance Committee and the Trump Administration has paved the way for a tax overhaul not seen since the Reagan Administration. Those 1986 tax reforms ushered in years of noninflationary growth, a bigger economy and, in turn, more tax revenue — a winning combination for reducing the federal debt — but are now outdated, putting our job creators at a competitive disadvantage with those overseas. Instead of a bigger economy, growth has stagnated and the federal debt has skyrocketed — a problem that was not helped by the tax-and-spend policies of the Obama Administration.
President Trump’s tax cuts and deregulation are the right ingredients for an economic renaissance. Indeed, a pro-growth policymaking climate has already been accompanied by a record-breaking stock market. The president recognizes what can happen when the federal government steps aside and lets American workers and American businesses take the reins. I am glad the Senate has taken the first steps to help realize this potential.