Russell says Americans want tax reform
The question is often asked if Congress will agree on tax reform by the end of the year. Congressman Steve Russell says it’s possible if Democrats and Republicans achieve a common ground.
Russell said he refuses to be baited into either side of the argument — either taxes to benefit the rich or Congress not caring about the poor.
“Why do we devolve ourselves into these senseless class warfare debates, gender debates and polarizing political debates?” Russell said. “Every American that approaches April 15 every year understands our tax code is absurd.
The current plan supported by Trump is reducing the seven tax brackets to only three. Somebody with a 15-percent tax bracket would see their federal taxes reduced to 12 percent, Russell said.
Currently a single person making between $9,325 and $37,950 has a federal tax rate of 15 percent (see https://www.tax-brackets.org/federaltaxtable). A single individual earning less than $9,325 would see their taxes go to zero, Russell said.
“That’s taking care of folks that need help,” Russell said.
Meanwhile some companies have moved out of the U.S. due to tax brackets. There is $12 trillion of untaxed capital offshore because if it is brought onshore it would be taxed 40-50 percent under the current code, Russell said.
The automotive industry has excise taxes at 9 percent. But the 9 percent is on the total sale of the vehicle instead of profit, he explained.
“It’s a 25 percent or higher what I call an American tariff on American goods,” Russell noted. “If that company moves to a country where we have free trade with, they can not only move the company to that place, (but also) have cheaper labor when the automobiles they make come in. No. 1 they’re not hit with excise taxes.”
These vehicles come across the border without a tariff and are able to compete at a 25 percent better rate of return, Russell said.
This dynamic can change by ceasing to punish U.S. companies for making American goods, Russell continued.
“This is what the President is trying to address when he talks about reaching out to industry and manufacturing and bring it back to our shores,” Russell said.
Priming the pump will bring dollars back to the U.S. which can be taxes. An employee with a new manufacturing job would rise above the poverty line with a good paying job, Russell explained.
“He will pay taxes where he wasn’t before. So that helps. But he also puts bread on his table,” Russell said.
Businesses will thrive with additional money circulating within the U.S for everyone to benefit. Russell said this is why tax reform is a bipartisan issue. Mortgage and charitable deductions will still exist with tax reform, Russell said.
“I think most Americans want to do that. They are willing to do that,” Russell said. “We need to do that.”