Republicans are set to release further details of their tax reform plan this week, and lawmakers in the House’s most conservative caucus says the plan must lower the tax rate and simplify the code.
“Our leadership has to stay strong and so the must-haves are just the basic pieces, deep cuts so we get the economy growing … protecting the small person, the small business back home, and then personal rate deductions for the forgotten man that was burning all the way through the Midwestern states,” Rep. Dave Brat, R-Va., said Tuesday at Conversations with Conservatives, a monthly press Q&A hosted by conservative lawmakers and The Heritage Foundation.
Rep. Jim Jordan, R-Ohio, said the tax reform plan should address specific categories.
“There are three kind of broad questions that have to be answered,” Jordan, formerly the chairman of the House Freedom Caucus, said.
“Will it actually be a tax cut, will it simplify the code, will it grow our economy?”
The Ohio congressman said the specifics on the corporate rate, small businesses rate, the repatriation rate, personal rates, the number of brackets, and how tax cuts will look for “regular people” are important.
There are currently seven tax brackets. Individuals, depending on their income, can either be taxed at 10 percent, 15 percent, 25 percent, 28 percent, 33 percent, 35 percent, or 39.6 percent.
Jordan also said the tax package should not be revenue neutral, meaning total taxes collected by the government remain the same.
“We don’t necessarily want to function in this revenue neutral world, which is taxes stay the same,” Jordan said. “We actually want to focus on letting families keep more of their money and designing a tax code that produces economic growth.”
Rep. Mark Meadows, R-N.C., chairman of the House Freedom Caucus, said he is confident these objectives will be addressed.
“Based on my personal conversations with the president, I think what we will see is a real keen sense of trying to make sure hardworking American taxpayers get the major benefit of any tax reform that we do,” Meadows said, adding:
He is so focused on making sure that we have a pro-growth agenda, and that is about getting people back to work and making sure that they benefit by putting money back in what he would describe as his core supporters, which was the Trump voter, making sure that they have job security, but also putting money back in their pockets.
A dealbreaker for Meadows, personally, is a corporate tax rate that is above 20 percent or a small business rate above 25 percent.
The current corporate tax rate is 35 percent.
“I want us to be aggressive,” Meadows said. “In fact, I would prefer something on the corporate that starts with the teens, and the president is at 15 [percent rate] and I support him in that. I believe that 15 [percent rate] actually, if put in place, would probably pay for itself over a 15-year budget window, not a 10-year budget window.”
“We’ll see what happens,” President Donald Trump said on Sunday discussing the corporate rate. “But I hope it’s going to be 15 percent. But it’s going to be substantially lower so we bring jobs back into our country.”
Rep. Andy Harris, R-Md., told reporters at the monthly press briefing that cuts for the middle class are key.
“I personally support the president’s idea to leave the bulk of the income tax cuts to the middle class,” Harris said. “Let’s raise the standard deduction of fewer middle class cut and perhaps leave the upper-income individuals where they are paying a lot of taxes so I personally would oppose increasing taxes on anyone in this tax bill.”
The standard deduction “is the portion of income that is not subject to tax and that can be used to reduce a taxpayer’s tax bill,” according to Investopedia.
