By Bob Latta
For Ohio families and small businesses, complying with our nation's confusing mess of a tax code can be a nightmare. It's tens of thousands of pages of complicated provisions that often take tax software, an accountant, or a lawyer in order to comply.
More than 31 years ago, President Ronald Reagan signed an overhaul of our tax code that paved the way for economic growth, higher wages, and more American jobs. At that time, many of the pundits and prognosticators said bold tax reform couldn't be accomplished. However, under Reagan's leadership, tax reform overcame the odds and was signed into law, unleashing a new era of American growth and innovation.
Unfortunately, much has changed in the last three decades and our tax code has fallen behind the times.
However, Republicans in Congress and President Trump have been working on bold tax reform, the Tax Cuts and Jobs Act, aimed at middle-class families and the small businesses that drive our economy. While this is the beginning of the process, not the end, there is a lot to like in the bill.
First, this legislation provides much-needed relief for those in the middle-class. For example, a family of four making $59,000 a year would keep $1,184 more of their hard-earned money in their pocket. A single teacher making $48,000 annually would see a tax cut of $1,300 thanks to a standard deduction that is nearly doubled and lower rates. A single mother making $30,000 a year would receive a refund of more than $1,000 to help pay the bills and buy groceries.
Second, this bill will produce a tax code that will be dramatically easier to use for all Americans. With a much higher standard deduction, nine out of every ten taxpayers will be able to file their taxes on a form the size of a postcard. By reducing the number of tax brackets from seven to four, it's easier to figure out exactly what you will owe.
Third, this reform bill would restore American competitiveness and create jobs. It allows small businesses to use a new 25% rate so that the engines of our economy can grow, expand, and hire more employees. That means a Main Street bakery that has an annual income of $59,000 would be able to keep $3,000 more of their income each year. That's money that can help navigate the highs and lows of business ownership, or it can be reinvested back into the business. According to the Tax Foundation, more than 36,000 new jobs would be created in Ohio thanks to the growth from this tax plan.
In addition, the plan puts businesses on equal footing with their foreign competitors to ensure jobs are created here at home, not in China or India. U.S. businesses are subject to the highest corporate tax rate in the world. However, some of the biggest companies skirt this by utilizing a team of lawyers and accountants to scour the code looking for every tax break. We fix this problem by eliminating tax havens and loopholes companies receive while lowering the overall corporate rate to ensure American businesses aren't at a disadvantage.
In a nutshell, this is big, bold reform.
With that being said, changing the status quo is never easy, and we've already seen this plan subject to ridiculous attacks. For example, the Washington Post Fact-checker gave "Four Pinocchios" to claims it would raise taxes on the middle-class. Don't believe the nonsense coming from entrenched interests that have a stake in keeping the current tax code as complicated as possible. Under this bill, Ohio families will keep more of their hard-earned money, and all will benefit from an economy that is dynamic, strong, and growing.
The time to fix our broken tax code is now.