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President Trump unleashed a new plan for tax reform in a speech at the Indianapolis State Fairgrounds on Wednesday.
The plans are the product of discussions between White House Treasury Secretary, Steve Mnuchin, the House Ways and Means Chairman, Kevin Brady, the Senate Finance Chairman, Orrin Hatch, House Speaker, Paul Ryan, Senate Majority Leader, Mitch McConnell, and White House economic policy chief, Gary Cohn. Their purpose will be to strengthen the middle class, grow the economy, and engender economic recovery by broadening the tax base, closing loopholes, and fostering growth.
According to a press release by the Treasury Department, the reforms will mean that less of the earnings of middle-class families will be subject to Federal income tax, and will reduce the number of tax brackets from seven to three: 12%, 25%, and 35%. It will also increase child tax credits and repeal the death tax and alternative minimum tax.
For business, the reforms seek to reduce the corporate tax rate to 20% and limit the taxation imposed on small and family-based businesses operating as sole proprietorships and small businesses corporations to 25%.
“This has been a long time coming. Instead of a source of pride, our tax code has become a constant source of frustration. It’s too big. It’s too complicated. It’s too expensive. Today, we are taking the next step to liberate America from our broken tax code.”
Similarly, the House Freedom Caucus, which is comprised of Congress’ most conservative members, said in a statement:
“President Trump has delivered a forward-looking tax reform framework that will let hard-working Americans keep more of their money, simplify our system, end carve-outs for special interests, and will help make our businesses competitive abroad. The Freedom Caucus looks forward to sending a final bill based on this framework to President Trump’s desk as soon as possible.”
The White House welcomed a hundred small business owners to participate in the “Engine of the American Dream” event on Tuesday. The event was designed to highlight small businesses and the role they play in the American economy. President Trump was joined by the administrator for Small Business Administration, Linda McMahon, and senior advisor, Ivanka Trump.
During his address, Trump highlighted his administration’s efforts to cut regulations, ease restrictions on energy, and cut taxes. He also thanked the small business owners for their hard work and for their contribution in growing the economy and creating jobs.
“You are the dreamers and innovators who are powering us into the future”, Trump told them, “that’s exactly what you are — and my administration will be there with you every step of the way.”
This event, and others like it (such as the ‘Made in America Week‘), symbolise an administration committed to helping business. Over August, conservative and business-aligned advocacy groups plan on spending millions boosting tax reform.