Yesterday, Congressman Tom McClintock offered an amendment to the tax bill and delivered remarks on the amendment at the House Rules Committee.
McClintock was Thursday’s KVML “Newsmaker of the Day”.
Here are his words:
This amendment assures that the tax reform bill leaves no taxpayer behind. It retains all the provisions on C-corporations and pass-throughs that are desperately needed to produce the kind of economic growth that our country is capable of. It strikes the provisions in the bill that change the personal income tax code and replaces them with a permanent, one percent across-the-board reduction in the rates in every bracket. This should fit within the existing budget authority and save an average family about $600 per year on their taxes.
Tax simplification is a worthy and important goal, but given the complexities of the tax code and the time-table we’re operating under, this bill is yielding a number of unintended and undesirable consequences that are entirely unnecessary and avoidable.
We are also working at cross purposes with our objective of tax relief for many families. Limiting the mortgage interest deduction will disrupt housing markets, particularly in high-cost states. Abolishing the deduction for state and local taxes means that many households in high tax states may see tax increases as a result of this measure. Eliminating personal tax exemptions and phasing out the new personal tax credit means many families seeing a tax cut this year may end up paying higher taxes in future years. The Joint Committee on Taxation estimates that nearly one fifth of families earning between $75,000 and $100,000 will see an average $500 annual tax increase by 2027.
The current measure not only fails to reduce the top marginal rate, it produces a new bubble bracket of 46 percent. Economic growth depends on how much your next dollar is taxed. That is the marginal rate. By holding – indeed, increasing – the top marginal tax rate, we are needlessly limiting the stimulative effect of this measure.
This amendment avoids all of these pitfalls and leaves no taxpayer behind. It assures that whatever deductions or credits that a taxpayer currently claims – wherever they live and whatever financial decisions they have made – their taxes will go down by one percent of their taxable income. Furthermore, by reducing all marginal rates, including the top rate, it maximizes the potential for economic growth.
Finally, I believe this will cure the objections we hear from individuals and groups who have made investment decisions based on the current tax structure and that threaten passage of the overall reform.
As Haley Barbour likes to say, “The main thing is to keep the main thing the main thing.” The main thing is not tax simplification. The main thing is to unlock the potential of the American economy. This bill — restoring an internationally competitive corporate tax rate and providing concomitant relief for small businesses — can do this. Why imperil this vital objective with personal income tax provisions that are undercutting what would otherwise be overwhelming public support for this bill?
I realize and appreciate all the work that has gone into making adjustments on the personal income tax provisions of this measure. I would love to see a simpler tax code where most people could file their taxes on a post-card. But considering the looming deadlines to enact the bill, the hyper-partisan political environment and the complications of making adjustments on the fly, I think we need to focus on the principal objectives of tax reform: economic growth and family tax relief.
That’s what this amendment does. I earnestly ask the committee to make it in order.”
The “Newsmaker of the Day” is heard every weekday morning at 6:45, 7:45 and 8:45 on AM 1450 and FM 102.7 KVML.