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Tax Reform
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The current U.S. tax system penalizes the qualities that make America great: thrift, saving, investing and risk taking. The tax code is also ridiculously complex. There are two new burdens gathering on the horizon that compound this threat to our economy: uncertainty and globalization. With Democrats in control of Congress, come January 1, 2011, more than 30 million taxpayers will pay the Alternative Minimum Tax; all income tax rates will increase dramatically across the board; capital gains and dividends taxes will rise; the child tax credit will be cut by 50%, the marriage tax penalty will resume, and the death tax will be back in full force. Add this all up, and American taxpayers will get hit with a $300 billion tax increase in that year and every year thereafter. In short, the tax code implodes in three years. All this is scheduled to occur as we struggle to compete in a global economy with countries like China and India.
America is at a crossroads. The current Democrat majority in Congress have made their plans clear: raise these taxes. In fact, they have already voted to raise marginal income tax rates, reduce the Child Tax Credit, increase the marriage penalty, increase the Death Tax, add a new tax on health insurance, increase taxes on energy production, increase tobacco taxes and increase taxes on foreign companies with subsidiary companies doing business in the United States (companies like T-Mobile, Nestle, Michelin, and Daimler-Chrysler). We couldn’t disagree more.
The current system is the product of a century of tinkering by tax lawyers, lobbyists, special interests, Congress, the IRS and corporations looking to erect barriers to their competitors.
We believe the tax code should be scrapped and replaced with a system that is flatter, fairer, and simpler. Our tax system should reward success, rather than punish it. It should encourage saving, investing and risk taking instead of taxing it. Businesses should make decisions based on what is best for business, not what is best for their tax return.
At a time when we are facing an unprecedented global economic challenge, our tax system should not be pushing jobs and capital overseas; it should make America the best place in the world to invest capital, grow jobs and start businesses. We believe our tax system should tax income once, at its source, and never again -- no tax on capital gains, no tax on dividends, no tax on death.
Taxes on American businesses are among the highest in the world. The top corporate tax rate in the United States is 40 percent. In Ireland it is 12.5 percent, in Hungary it is 16 percent. Even Germany’s tax rate is lower than ours at 38.4 percent. In fact, of the 30 major countries in the world, only Japan has a higher rate than the United States at 40.7 percent.
Our tax system should be border adjustable so our exports can compete and our imports are treated equally. Businesses should have immediate expensing and no more convoluted and irrational depreciation schedules.
There is no other single factor that determines the growth and success of a nation’s economy more than its tax code. Ours is obsolete and downright destructive.
America can and should lead the world in the 21st century to a dynamic, prosperous and free global economy. And by leading the way, we will help those who have not seen hope, growth and prosperity see the future and come to realize personally what is known as the “American dream.”
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