Congress Must Pass Tax Reform By The End Of The Year
As the primary author of two of the largest tax cuts in Missouri state history and the product of a working class family, I was honored to join President Trump in Springfield, Missouri last week as he laid out his vision for tax reform that is pro-growth, pro-American and pro-worker.
My parents accompanied me to the speech. They worked hard when I was a kid to provide for our family and ensure our needs were always met. My father, who worked seven days a week on the midnight shift, instilled in me the value of working hard and counting every dollar. When President Trump announced he’d be looking for Congress to cut taxes and create jobs, my dad leaned in and told me, “It’s about time.”
He was right. It’s about time.
Our tax code is the kind of confusing and burdensome product middle class families have come to expect from an out-of-touch bureaucracy. For years, D.C. politicians on both sides of the aisle have pledged to fix the problem but have so far failed to deliver. Instead of delivering tax relief for American workers, Congress has rigged the game to benefit only the powerful special interests. It’s time for Congress to end the promise-breaking once and for all by enacting substantive reform by the end of the year.
Without any significant changes since 1986, the system we have now works against economic growth and reinforces stagnation. To combat those forces, there are a number of straightforward reforms with bipartisan appeal that Congress should include in any overhaul attempt.
Tax reform efforts should focus first on simplicity. Hardworking taxpayers have neither the time nor the energy to decode thousands of pages of government jargon and complexity just to fulfill their yearly obligations as good citizens. The Tax Foundation has found that Americans spend a whopping $99 billion and 2.6 billion hours each year complying with income tax requirements. That’s absurd and it needs to change.
Even benefits and deductions that have been put in place to help families are designed in a way that makes them confusing and complicated. For example, there are currently 12 overlapping federal tax benefits related to education. Families would have to read a novel’s worth of tax code legalese if they wanted to figure out which of those they can use for their kids.
Reform legislation should also address our nation’s need for job growth. We have one of the highest corporate tax rates in the industrialized world at 35%, and once state taxes are accounted for the average American corporation pays over 39% in taxes. Our extreme tax burden encourages businesses to keep profits overseas instead of investing in Main Street.
When a business closes its doors for good or sends its operations overseas because of our broken tax code it’s not politicians who suffer — it’s the workers. We need a system that does more to incentivize companies to expand their operations and put Americans back to work.
Tax reformers must also focus on increasing take-home pay for those who have made it on the payroll. Lower-income pay has stagnated since the 1970s. This cannot continue. American taxpayers work hard every single day to provide for their families, and they know how to spend their money better than the federal government. Congress must acknowledge this by reducing income taxes and lowering the overall tax burden.
There are very few things that Washington. D.C. can do in a timely manner. Tax reform, however, should be one of those things. These policies are straightforward, common-sense solutions that leaders must work to find middle ground on.
I know it’s possible because we’ve done something similar here in Missouri. Next year, individuals and small businesses will get a break on their taxes as reforms I worked on in the legislature begin to take effect. It wasn’t easy to get those policies passed, but I fought for them alongside allies from both sides of the aisle because it was the right thing to do.
Now it’s time for Congress to take up the mantle. Missourians will be watching this debate closely, and we expect Congress to show us tax reform that benefits working families by the end of the year.
Eric Scmitt has served as State Treasurer of Missouri since January 2017.