WASHINGTON – U.S. Senator Jerry Moran (R-Kan.) issued the following statement today after the Administration, the Senate Finance Committee and the House Ways and Means Committee released their tax reform framework:
“It has been more than 30 years since President Reagan signed the 1986 Tax Reform Act – the economy was entirely different and the way we do business across the world has changed drastically. Americans can no longer afford the status quo of an outdated and complicated tax system. Today’s tax reform framework is a first step toward growing our economy, boosting small businesses, creating new jobs and keeping good jobs here at home. Creating a fairer and simpler tax code means better days for working families and higher paying jobs in Kansas and across the country. I look forward to working with my colleagues and the Administration on this tax reform framework.”
HIGHLIGHTS OF THE UNIFIED TAX REFORM FRAMEWORK
Lowers Rates for Individuals and Families
The framework shrinks the current seven tax brackets into three – 12%, 25% and 35% – with the potential for an additional top rate for the highest-income taxpayers to ensure that the wealthy do not contribute a lower share of taxes paid than they do today.
Doubles the Standard Deduction and Enhances the Child Tax Credit
The framework roughly doubles the standard deduction so that typical middle-class families will keep more of their paycheck. It also significantly increases the Child Tax Credit.
Eliminates Loopholes for the Wealthy, Protects Bedrock Provisions for Middle Class
To provide simplicity and fairness the framework eliminates many itemized deductions that are primarily used by the wealthy, but retains tax incentives for home mortgage interest and charitable contributions, as well as tax incentives for work, higher education, and retirement security.
Repeals the Death Tax and Alternative Minimum Tax (AMT)
The framework repeals the unfair Death Tax and substantially simplifies the tax code by repealing the existing individual AMT, which requires taxpayers to do their taxes twice.
Creates a New Lower Tax Rate and Structure for Small Businesses
The framework limits the maximum tax rate for small and family-owned businesses to 25% – signifcantly lower than the top rate that these businesses pay today.
To Create Jobs and Promote Competitiveness, Lowers the Corporate Tax Rate
So that America can compete on level playing eld, the framework reduces the corporate tax rate to 20% – below the 22.5% average of the industrialized world.
To Boost the Economy, Allows “Expensing” of Capital Investments
The framework allows, for at least five years, businesses to immediately write o (or “expense”) the cost of new investments, giving a much-needed li to the economy.
Moves to an American Model for Competitiveness
The framework ends the perverse incentive to o shore jobs and keep foreign profits overseas. It levels the playing eld for American companies and workers.
Brings Profits Back Home
The framework brings home profits by imposing a one-time, low tax rate on wealth that has already accumulated overseas so there is no tax incentive to keeping the money o shore.