House and Senate negotiators are working to forge a final tax-reform bill that will stimulate job growth and provide significant tax relief, according to the leader of the nation’s largest grassroots taxpayer organization.
“The bills are getting better all the time,” National Taxpayers Union President Pete Sepp told WND and Radio America.
Sepp admitted there are still some important differences to be hammered out between the House and Senate versions of the legislation, beginning with how to provide relief to small business owners.
“How will small business tax relief be provided? The Senate does it through a deduction. The House does it through rate reductions. That needs to be reconciled,” Sepp said.
Tax reform could be the next BIG score for President Trump! Thank him for all his accomplishments during his first year in office. Send him a FREE card of your choice. Go to ThankTrump.us
And while he prefers the House approach, Sepp suspects the Senate will get its way.
“I think the House’s action to provide a special nine percent tax rate for small businesses on the low end and maintaining a cap at 25 percent is attractive to senators, but I think that the boosted deduction – that started at a little over 17 percent but went past 20 in the final version – is probably going to prevail there,” Sepp explained.
Listen to the WND/Radio America interview with Pete Sepp:
Another battle looms over whether to lower the corporate tax rate from 35 percent to 20 percent in the final version, or make it 22 percent as some Republicans are suggesting. Sepp is vigorously pushing lawmakers to insist upon a 20 percent rate, and the National Taxpayers Union spearheaded a letter from many groups urging no softening on that issue.
Sepp said the difference between the two rates is more significant than many people realize.
“Twenty-two percent or so is roughly the current rate that most of our trading partners are averaged at in terms of the corporate income tax,” Sepp said. “That doesn’t include the state corporate rate that’s on top of the federal rate. If we go with 22 in our bill, we’re not at parity with our trading partners. We’re still higher.”
Many critics of the bill – and particularly the big cut in the corporate tax rate – contend that the higher revenues will not result in business expansion and job creation. Sepp said the Congressional Budget Office begs to differ.
“History does show strong job creation as well as wage growth among workers by reducing corporate income taxes,” he said. “Even the Congressional Budget Office, which is one of the more skeptical agencies about the impact of tax reform, says that at least 25 percent – 25 cents on every dollar of corporate tax rate reduction – accrues to the benefit of wages among workers.”
Another common complaint from Democrats is that the plan gives massive tax cuts to the wealthy while the middle class gets stiffed. Sepp said that is dead wrong.
“When you look at the Joint Tax Committee’s own score of where the distribution of the tax relief will be and you isolate it for the income and estate tax effects, we’ll find that the income level of $50,000-$75,000 will receive a 28 percent tax cut, millionaires (get) a four percent tax cut,” he said. “That is an incredibly progressive tax reduction.”
Sepp did point out some other differences need to be ironed out, including the aforementioned estate tax.
“Will the death tax be repealed as the House wants to, or will the exemption simply be raised, which is what the Senate wants to do?” Sepp asked.
He also urged negotiators to side with the House in fully scrapping the Alternative Minimum Tax.
Sepp is increasingly optimistic that something will actually get done, but he said the American people need to push this effort over the finish line.
“I’m now 80 percent confident,” Sepp said. “If we want to get to 100, more citizens have to contact their members of Congress and tell them to keep working on this deal. We’re almost there.”