Apr 18, 2017
We Can Do Tax Reform Without Tax Hikes
Post by Freedom Partners
With the promise of comprehensive, pro-growth tax reform from Congress and the administration, many Americans believe — or hope — that soon they will be keeping more of their hard earned money and paying less to the government each April.
Republicans in the House of Representatives have put forward many positive reforms in their effort to fix our nation’s broken tax code. But, there’s a catch.
Under the current proposal, there is a troubling provision that would undermine many of the positive reforms that would benefit Americans the most – a new trillion-dollar tax. This 20-percent levy on imports, or Border Adjustment Tax (B.A.T.), would send costs soaring for businesses, ultimately resulting in more expensive everyday consumer goods. Proponents of B.A.T. are justifying the measure as a means to find a trillion dollars in new revenue to lower existing tax rates. Unfortunately, they’ve decided that consumers will be footing the bill rather than cutting government waste, closing tax giveaways for special interests, and ending corporate welfare.
Proponents of the new tax maintain they don’t know any other way to get tax reform done and question viable alternatives.
“If you want to replace the border adjustable feature of the corporate income tax, you have to come up with a solution … you have to come up with about a trillion dollars over a decade, in reducing some of the other tax cuts,” Americans for Tax Reform President Grover Norquist, a supporter of the new tax, told MSNBC. “The burden is now on the critics of the B.A.T. to say – what’s your alternative?”
The fact is, there are options that should be considered before any new tax on millions of Americans.
Americans for Prosperity has already identified more than $2 trillion in wasteful spending, unnecessary programs, and corporate welfare that could to be eliminated instead of imposing a new trillion-dollar tax on U.S. consumers.
Economists Veronique de Rugy of George Mason University’s Mercatus Center and Dan Mitchell of the Cato Institute believe that Congress should drop the import tax and focus on policies that will boost growth, including spending restraints.
“To get the maximum bang for the buck, the final package should include restraints on spending—which doesn’t even mean an absolute budget cut. If Congress simply limits the growth of outlays to about 2% a year, that would create enough fiscal space to balance the budget over 10 years and adopt a $3 trillion tax cut,” the pair wrote for the Wall Street Journal. “If Republicans want a win-win, dropping the border-adjustment tax is the way to get one,” they added.
Americans deserve tax reform, not a new tax on things they buy every day. We urge Congress and the administration to consider other options – such as reducing wasteful spending, closing tax loopholes, and ending corporate welfare – instead of enacting new taxes.