JEFFERSON CITY, Mo. – President Donald Trump on Wednesday kicked off his tour to pitch his plan to bring heavy changes to America’s federal tax code, and while he discussed some of what he hopes to accomplish while making his first stop in Missouri, he didn’t spend much time going into the details of the plan.
In a short speech given at a local ventilation and furnace company located in Springfield, Mo., the Republican president who secured a 19-point win in the Show-Me State just months before promised a mixture of corporate tax cuts and individual tax reductions that he said would boost the middles class. It’s projected to be one of the biggest tax overhauls in the nation’s history, and the U.S. hasn’t seen a major overhaul of the federal tax code since 1986.
His plan centers around four main goals:
- Simplify the tax code
- Eliminate special interest loopholes
- Provide tax relief for middle-class families
- Cut the corporate tax rate
“My administration has embraced a new economic model. It’s called, very simply, the American model,” Trump told those in attendance on Wednesday, saying the reforms would encourage companies to grow and hire in America, create more jobs, and raise wages.
Trump’s plan is one that he has promised for months now, including the slashing of the corporate tax rate from 35 percent to 15 percent.
The President on Wednesday said that other countries with lower corporate tax rates are more attractive to American companies, and are “taking us, frankly, to the cleaners.”
The president said the nation’s high business tax rates as the top reason companies based in the U.S. choose to do business abroad, saying they leave money and assets overseas because of “bureaucratic and difficult” tax regulations.
Trump shared his hope that a tax overhaul will “bring back trillions of dollars in wealth that’s parked overseas,” while also creating a pro-growth job market and boost a “pro-American” economy.
James P. Pinkerton is the co-chair of the RATE Coalition (Reducing America’s Taxes Equitably), a bipartisan group that aims to reduce the corporate income tax rate by broadening the tax base. He says that the President’s plan would serve to level the playing field with other countries that enforce a corporate tax rate that can sometimes be nearly half of the current U.S. corporate tax rate.
“As the President said, if you add in the average of state tax rates, then you get to a number somewhere in the 40s,” Pinkerton said. “So, the rest of the world is, on the average, at 23 and we’re sitting at around 40 or 41. That’s counter-productive to the American economy and it’s bad for jobs. And one of the things that economists have demonstrated is that the cost of the corporate income tax is born in large measure by the workers. The workers are always the losers.”
It also calls for a redistribution of the tax brackets, consolidating the seven current brackets into three. The income tax brackets would be set at 10%, 25% and 35%, the latter for the wealthiest Americans, down from the current 39.6% rate.
“Americans know better how to spend their money,” Trump said, telling the audience that the tax reform would allow citizens to take home as much of their money as possible and then spend it as they see fit.
The President’s plan was applauded by many Missouri Republicans, including State Treasurer Eric Schmitt, the man behind some of the Show-Me State’s largest tax cuts in recent history.
“Having worked to pass two of the largest tax cuts in Missouri history, I know the importance of enacting tax reform that spurs economic growth and expands opportunity,” Schmitt said in a statement. “President Trump’s proposal to reduce the tax burden on businesses, simplify our overgrown tax code and provide relief for working families is a step in the right direction toward revitalizing Main Street and increasing take-home pay for hardworking taxpayers.”
Though not in attendance at the event, Missouri Attorney General Josh Hawley wrote an editorial that was published by Fox News just hours before the President’s arrival, in which he called for sweeping reforms of the tax code, not unlike those being pushed by President Trump.
The Institution on Taxation and Economic Policy says that, based on Trump’s publicly stated tax principles, Missourians making more than $1 million per year would receive a tax cut equal to 7.9 percent of their income. The largest group of Missourians, those making less than $45,000 per year, would get a tax break equal to 1 percent of their income.
But to enact those policy changes, the President will need the help of the U.S. Congress, which could mean some of those lofty ideas may have to be tempered before a proposal is fully laid out. And with what some might call drastic changes, there’s always room to exercise caution.
“Is there a reason to be cautious? Well, you always have to consider other variables, including the deficit or social equities and so on,” Pinkerton said. “So I think that the lesson of the Coolidge tax cuts, the Kennedy tax cuts or the Reagan tax cuts is that about the most important thing you can do for the economy is getting the tax code right. And if you get that right, the deficit and everything will take care of itself.”
GOP congressional leaders and the White House have yet to reach an agreement on the details of the tax plan and proposals are expected to go through congressional committees before the plan takes its final shape, but that hasn’t stopped the President from calling on them to pass the reform he’s looking for.
“Today I’m calling on all members of congress to support pro-American tax reform,” Trump said. “They have to do it, it’s time.”
He even targeted Missouri’s U.S. Senator Claire McCaskill in his speech.
“She must do this for you, and if she doesn’t do it for you, you have to vote her out of office,” Trump declared.
Still, Trump’s administration is enthusiastic about the plan, which they seem to think can be acted on rather quickly.
“One thing you learn is that nothing happens in Washington as quickly as you would want it to, but we believe that the opportunity is in front of us to get this done before the end of the year,” Pinkerton said.
PHOTO/TWITTER-ERIC SCHMITT
Benjamin Peters was a reporter for The Missouri Times and Missouri Times Magazine and also produced the #MoLeg Podcast. He joined The Missouri Times in 2016 after working as a sports editor and TV news producer in mid-Missouri. Benjamin is a graduate of Missouri State University in Springfield.
