Congressman Rick W. Allen (R-GA-12) released the following statement in response to release of the unified framework for fixing our broken tax code:
“It has been over 30 years since our broken tax code was last reformed, but today, President Trump and the Republican Congress laid out a tax framework that will provide relief for hard-working Americans and jumpstart our economy. Bold reforms will increase paychecks, grow local businesses, and expand our economy in ways that we have not seen in a long time. Our plan will accomplish all of these goals, making the tax code affordable, simple, and competitive. It will allow middle class Americans to keep more of their hard-earned paychecks and level the playing field for American businesses and workers to bring jobs back home. The unified tax reform framework will protect the American dream for families and remove the tax burdens strangling our economy.”
Please see below for 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% - significantly 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 field, 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 off (or “expense”) the cost of new investments, giving a much-needed lift to the economy.
Moves to an American Model for Competitiveness
- The framework ends the perverse incentive to offshore jobs and keep foreign profits overseas. It levels the playing field 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 offshore.