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WHITE HOUSE REVEALS NEW TAX REFORM PLAN

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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%.

The reforms have received support from both politicians and numerous free-market groups. The Republican Congressman from Wisconsin, Paul Ryan, said on Capitol Hill:

“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.”

 

PRESIDENT TRUMP PUTS TAX REFORM ON THE TABLE

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President Trump has chosen Springfield, Missouri, to outline his planned tax reforms for the United States.

President Trump’s speech, which used overarching themes, outlined the four principles which would guide the reforms. First, a tax code that is easy and simple to understand. Second, a tax rate that would allow businesses to remain globally competitive. Third, tax relief for middle-class families. Fourth, tax breaks for corporate profits repatriated abroad.

During his speech, President Trump stated:

“We’re here today to launch our plans to bring back Main Street by reducing the crumbling burden on our companies and on our workers. The foundation of our job creation agenda is to fundamentally reform  our tax code for the first time in more than 30 years.”

President Trump went on to note that tax reform would help small business and encourage economic growth at all levels. He commented that ninety-percent of taxpayers required help filing their taxes and that the current system only benefited those who could afford good tax lawyers and accountants.

President Trump also implored the US Congress, in particular, the Democrats, not to blow their chance at tax reform. President Trump said:

“This is our once in a generation opportunity to deliver real tax reform for everyday, hardworking  Americans. This is our opportunity to deliver real tax reform for Americans. I am fully committed  to working with Congress to get this job done.”

Speaking to Democrats, President Trump said:

“Put the partisan posturing behind us and come together as Americans, to create the 21st-century tax code that our people deserve. What could possibly be more bipartisan than helping people keep more  of what they earn?”

Whilst it is believed tax reform will increase employment among Americans, Republican Senator from Kentucky, Rand Paul,  has expressed concern about overhauling the tax code without first lowering revenue. In an op-ed for CNN, Paul stated:

“Tax reform can be simple, but I’m afraid those who are in charge will make it unnecessarily complicated.”

Despite this, there have been concerns over the effects of tax cuts on the Federal budget deficit and Federal debt levels. Furthermore, there is also concern that the White House may have a difficult time selling their tax reforms to the American people. Cliff Simms, the White House Director of Message Strategy, dismissed this, saying:

“I think that the media underestimates the economic understanding of the American worker out there  — middle-class, rural, blue-collar folks in Michigan and Ohio and Pennsylvania and other states  around the country who have watched the tax code, the tax system as it is today play a huge role in  their factories closing and being shipped overseas. They totally understand competitiveness and  totally understand how this is going to — in the President’s words — help us win again.”

WHITE HOUSE HOSTS SMALL BUSINESS FOR “ENGINE OF THE AMERICAN” DREAM EVENT

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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.