Tax Cuts Now!
On Friday, a bus emblazoned with the mantra “Tax Cuts Now” parked itself in front of the main Internal Revenue Service (IRS) building in downtown Washington, DC and out piled small business owners who had been traveling the country, preaching their tax cut evangelism across this great land with the aid of the Job Creators Network and the American Legislative Exchange Council.
Hoping to bring awareness to the high corporate tax rate among other things, the group has a website where those supportive of their goals can sign a petition. And those on the bus bring their own personal stories to help persuade people who may otherwise not realize the importance of reducing the stranglehold of taxes on middle income wage earners and small businesses.
One bus traveler, a small business chemical manufacturer, told the story of his success but noted he owes nearly 50% of his profit to the federal government in taxes. He’s had to mortgage his house seven times to pay his taxes over the years, he said. A remarkable statistic. His goal? To simply make the corporate tax rate in America — currently sitting around 40% — globally competitive again.
Noted economist Steve Moore was on hand Friday as well and quipped, looking at the IRS building behind him, that it shouldn’t take what amounts to the manpower of a small city to enforce the tax code. That got some laughs, which is not something generally associated with any discussion of the tax code, certainly not over the last decade or so.
But there’s reason now for small business owners to feel optimistic, as Larry Kudlow wrote last week in National Review: President Trump believes in their cause:
Make no mistake: Trump is absolutely committed to tax cuts. This is completely unlike the health-care muddle. And critical here is the argument Trump is making: A big drop in large- and small-business tax rates will mostly benefit middle-class wage earners…
There are two big numbers standing atop Trump’s tax plan: 3 percent and 15 percent. Three percent is the new growth path that will normalize America’s economy and generate at least $3 trillion of additional revenues over ten years (or sooner). This is the mother of all pay-fors. Fifteen percent is the corporate rate that will spur capital-formation, business-investment, productivity, and real-wage increases…
The GOP needs a budget resolution, which will contain crucial, 51-vote reconciliation instructions on spending and taxes. But where there’s strong political will, legislative ways and means will be found. Ten weeks is plenty of time.
It does appear that tax reform is an issue whose time has come, with everyone from Texas Sen. Ted Cruz to financier Steve Forbes weighing in (the latter mostly joining Kudlow into shaming Speaker of the House Paul Ryan into foregoing Congressional Budget Office projections).
But the spin has also begun, with the general press already reporting Trump doesn’t want tax reform to benefit the rich.
However, Trump and his Treasury Secretary Steven Mnuchin have insisted that the wealthiest will play a role in tax reform. According to CNN, Mnuchin said at a Politico event last week “that even if the wealthy get a break in their income tax rates, they ultimately may not pay less because of expected eliminations of loopholes and other tax breaks that they take advantage of.”
For his part, Trump is simply asking Congress to move quickly on whatever they decide to do about tax reform. The Tax Cuts Now group may have reached half their goal.