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Wednesday, November 15, 2017

Simplifying Taxes—Not Cuts—Should Be Congress’ Top Concern

https://www.nationaleconomicseditorial.com/2017/11/14/simplify-tax-code/

The Republican’s proposed Tax Cuts and Jobs Act is the archetypical tax reform bill: it lowers taxes but increases their complexity.  High taxes are bad, but a complex tax code is worse.  America deserves better.
This is not to say that high taxes are not a problem.  They are.  America is objectively-speaking one of the most heavily taxed jurisdictions in the developed world: this is the main reason why so many firms move their head offices out of America and into low-tax jurisdictions like Canada or Ireland.  The corporate inversion epidemic is made in Washington.  High taxes also hurt individuals: according to the Tax Foundation, taxes cost Americans more out-of-pocket earnings than do shelter, clothing, and food combined.  Tax cuts are a must.
The Tax Cuts and Jobs Act largely delivers on this front.  The legislation will slash the corporate tax rate from 35 to 20 percent, reduce the number of individual income tax brackets, and double the basic personal deduction, which will let people shield more of their income from Uncle Sam.  And perhaps most importantly, the bill will remove loopholes that allow illegal aliens to collect some $23 billion in tax credits annually.

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