Taxes, Taxes, Taxes
“We want America to wake up on New Year’s Day, 2018, with a new tax system.” said Paul Ryan in an interview with the New York Times.
According to U.S. News, House Speaker Paul Ryan is expected to have an outline for tax reform by Sept. 25. Ryan has kept focus on “tax cuts for middle-class families”, while deflecting the issue of tax cuts for the rich. He also stated the importance of keeping companies in America and bringing those back that have left.
“U.S. companies are quickly becoming foreign companies for tax reasons.” said Ryan. He went on to talk about a Wisconsin company that moved its headquarters from Milwaukee to Dublin, Ireland because of corporate tax rates. He has also said that $3 trillion in ‘trapped cash’ is being kept overseas, because of our high corporate tax rate.
While he tries to keep the issue of tax reform front and center, a multitude of issues are arising. Undocumented Americans are fighting deportation, southern states are recovering from two disastrous hurricanes, climate science is emerging, Trump is moving back and forth from his base, North Korea is being North Korea, and an 11-year-old is mowing the White House lawn.
Why is it important to talk about tax reform now?
Tax reform affects every American, and if the House Republicans can go through with this plan, it may save some seats from being lost in next year's midterm. You can tell Ryan is worried, since he has been pushing blame toward the Senate since the failure of healthcare.
“We crafted a plan, we ran on the plan, and then we passed that plan in May,” he said. “Who wasn’t disappointed that the Senate failed to pass the bill by one vote the other day? We all are.”
If tax reform doesn’t get passed before next year's election, Ryan may lose his majority. Even if it does get passed, history shows that the party in control of the White House looses Congressional seats that following midterm.
When looking at his tax plan, two things stick out. First, he wants the tax form to fit on a postcard. Who doesn’t want it to be that easy? Without a closer look, this sounds great. But, Ryan is removing many of the tax-deductible items that are normally found in a tax form. These things help promote positive behaviors and policies that benefit the public. An important deduction left off is higher education expenses, including student loan interest and other expenses. Until we learn more details, I don’t see how this would benefit the public.
“U.S. companies are quickly becoming foreign companies for tax reasons.” said Ryan.
Ryan also backed President Trumps thinking on a 15 percent corporate tax, as other countries have that rate, but also reasons how difficult that would be. He supports a 22.5 percent rate, the industrialized world average. He is working with his staff to find out how to make the numbers work, The Hill reported.
“Our plan is really simple. It is to get businesses competitive again,” Ryan said.
Aleve, Ford, and Amazon are among a hand full of companies that have talked about expanding their company in American cities by creating jobs and adding new factories. With more job creation on the way, it's still important to talk about where companies are based. With companies building large headquarters in Dublin, Calgary, Munich, London and other major cities around the world, it furthers the point that globalization is hurting America.
Corporations still have a presence here, but they know it is in their best interest to base their company overseas. If we want America to keep expanding its economic leverage over other countries, we should look at the corporate tax rates.
As we look in the coming weeks, we need to pay attention to these issues. Ryan is focused on playing politics, but you should be focused on how this new tax system will affect you.