— Michael Clayton
Congress is set to return from August recess next week, and Senator Rand Paul is signaling that he is ready for a fight on tax reform.
In a CNN Op-Ed yesterday, Senator Paul proclaimed his intention that Congress “get it right” because of the “major implications” any reform package could have on Americans for years to come.
But he expressed reservations about his own party’s commitment to cutting taxes, and rightfully so. Decades of promises to cut taxes, only for Republicans to turn around and raise taxes, multiple times, has left a sour taste in many conservatives’ mouths. And once again Republican leadership has indicated they want “revenue-neutral” tax reform, aka no tax cuts.
President Trump promised HUGE tax cuts on the 2016 campaign trail, but will he be able to deliver or will Republican leadership continue to get in his way?
Senator Paul explains why revenue-neutral tax reform is a bad idea:
“Revenue neutral ultimately means that someone pays more for someone else to pay less. It means tax ‘reform’ without real tax cuts.
Let me ask you a serious question. If someone has to pay more for someone else to pay less — which category do you think you and other Americans might fall into? I fear that tax reform that mandates revenue neutrality will result in those with the best lobbyists, lawyers and accountants being the winners, while most everyone else either gets nothing or largely loses out.”
Shifting the tax burden around not only fails to stimulate economic growth we desperately need, it hurts other Americans who are paying less in taxes. And don’t expect the wealthy and well-connected to be happy if asked to pay more – they will undoubtedly fight it the entire way, and probably win.
Republicans used to stand for tax cuts, and they still profess it on the campaign trail, but when it comes to putting their ideas into action, they are just too afraid. We’ve already seen this play out in the fight to repeal ObamaCare this year – big promises, no action.
One of the reasons Republicans struggle with tax cuts is many of them are addicted to government spending. They no longer look at taxpayer dollars as coming from the taxpayer, but as a source of government revenue, like most Democrats. It’s as if they see the government as some sort of big business just trying to turn a profit (spoiler alert: it isn’t). Most politicians simply won’t cut spending, so how can they afford to cut revenues?
This is a dangerous way of looking at taxpayer dollars, but unfortunately, it appears to have affected most of the country. It makes it nearly impossible for people to think rationally about government spending, because “it’s only government money” rather than thinking about it for what it truly is: our money.
That’s why Senator Paul believes any tax reform needs to focus on these three areas:
“First, every American who pays taxes should get a tax cut. Every rate should be lowered by a percentage. What percentage? That’s where we conservatives can negotiate with fence-sitters if necessary. I’d favor a large cut of at least 15% for every taxpayer. But the main and important thing is that everyone gets a tax cut.”
“Next, we need to simply slash the corporate tax rate to 15%, and not worry about any complicated reform that no one will agree on, or that takes 500 pages to explain. Cut the rate so it is competitive with other countries. (15% makes us even with Canada’s federal rate.) Cut the rate so that it can create jobs. Cut the rate to encourage people to start new businesses, hire more people and grow. According to a 2016 Tax Foundation analysis of then-candidate Donald Trump’s tax plan, comprehensive reform, including lowering the corporate rate to 15%, could create around 2 million new jobs.”
“Finally, let’s stop the double taxation and international money hoarding of our biggest companies. There is more than $2 trillion parked overseas by companies such as Apple, Google and others. Why? Because they already paid taxes on it over there, and we want them to pay 35% to bring it back. They’re never going to do it. That’s a fantasy. Let’s cut the rate to 5%, make it voluntary and get that money home to create more jobs. A 5% voluntary rate still brings in billions of additional revenue, which could be targeted to building and repairing infrastructure.”
These are common sense, conservative solutions to our current convoluted tax system. These are also ideas that Republicans have touted for years.
We can no longer allow Republicans to promise tax cuts during election season then fail to deliver during legislative season. Republicans control the House, the Senate, and the White House. If they fail to deliver the promised tax cuts, they should all be voted out of office.
The easiest way to shrink the size of our bloated federal government is to cut taxes and cut spending. Doing one will have an enormous impact on the other. With fewer taxpayer dollars to spend, the federal government would be forced to cut spending and downsize. It would force the federal government to spend money only on essential government functions.
In closing, Senator Paul gave a suggestion to President Trump:
“Lead with boldness and vision. Lead with simple ideas. And make sure your simple ideas don’t get hijacked by others’ agendas. I’m right here, ready to fight.”
America’s Liberty PAC wholeheartedly agree with your suggestion, Senator Paul, and we stand right here, ready to fight with you.