Our federal tax code is long overdue for a complete overhaul – it has saddled businesses with some of the world’s highest tax rates, deprived families of their earnings, and served as an obstacle to the growth of the national economy. That’s why I was pleased on November 17 to join Arizona Senator Jeff Flake for an employee town hall meeting on tax reform at Geco, a Mesa-based aerospace technology company. It was truly an occasion for taxpayers to celebrate, coming just a day after Senator Flake’s colleagues in the House of Representatives passed a tax reform bill through their chamber.
Now for the first time in years, federal lawmakers are moving legislation that would provide deep and lasting tax relief for Arizona businesses like Geco and for families across Arizona. Under both the House’s and the Senate’s proposals, our nation’s corporate tax rate would be slashed to just 21 percent, with tax rates for small businesses (so-called “pass-throughs”) also dropping to historically low levels. This means businesses of all sizes would be empowered to expand, invest more capital, and hire more employees. Tax reform is therefore key to creating new jobs in Arizona and building a platform for sustained growth that can benefit the next generation of entrepreneurs.
The current plans now advancing through Congress would also deliver much-needed relief for middle-class families. And according the Tax Foundation, thanks to the economic growth unleashed by the bill, the typical Arizona family could expect almost $2,200 in after-tax additional income. There’s equally exciting news on the way. The Senate’s iteration of tax reform could mean even greater gains for families as the legislation is prepared for floor action.
Tax reform presents still other important opportunities. By simplifying the law, we can help update and improve a tax system that President Trump has called “ridiculously complex” and ensure that taxpayers are no longer forced to waste nearly 7 billion hours and spend more than $262 billion complying with a broken tax code.
The reality is that everyone would benefit from pro-growth, simplified tax reform, especially American workers. And make no mistake, corporate tax changes can have this effect, too. Even the Congressional Budget Office, which has a skeptical analytical outlook, acknowledges that one-fourth of the corporate income tax burden is attributable to workers “in proportion to their labor income.” Other research puts that proportion more than twice as high, showing that in the end bad business tax policy hurts workers the most, in the form of fewer opportunities and depressed wages. On the other hand, sensible tax policy would help workers immensely.
As Senator Flake and his colleagues pursue their efforts to reform our tax code, it is critical that they treat all sectors of our economy equally, avoiding punitive taxes that target specific industries. By striving to treat all businesses fairly and focusing on delivering real tax relief, our elected officials can help change the direction of our economy and unlock the American dream for millions more of us.
Through advocacy on Capitol Hill, public outreach, ads, and other implements in our “Tax Reform Toolkit,” National Taxpayers Union is working hard to move legislation across the finish line. Together with Senator Flake – a stalwart taxpayers’ friend – we can get the job done.
— Pete Sepp is president of the National Taxpayers Union.