America has opportunity for overhaul of tax code

Guest column by Jeff Wasden
Posted 9/19/17

President Trump visited Springfield, Missouri, and laid out his plans for reforming our nation’s outdated, complex and uncompetitive tax system. The president’s plan is built around an America-first tax system that is focused on jobs, increasing …

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America has opportunity for overhaul of tax code

Posted

President Trump visited Springfield, Missouri, and laid out his plans for reforming our nation’s outdated, complex and uncompetitive tax system. The president’s plan is built around an America-first tax system that is focused on jobs, increasing wages and wealth in America, and restoring the American dream.

The Business Roundtable conducted a survey of their CEOs and 90 percent responded that delaying tax reform will harm the U.S. economy by causing slower economic growth, hiring, and capital investment. Fifty-seven percent of the responding CEOs say delaying tax reform means their company will delay capital spending, the investment that drives jobs and growth. Fifty-six percent say their companies will delay hiring plans.

President Trump believes lower taxes and higher wages will result in a better life for all Americans and make the American dream more accessible than ever before. The Colorado Business Roundtable enthusiastically endorses a tax reform plan that accomplishes four goals — simplification of our tax code so that it is fair to all Americans, provides reforms that lead to job creation and higher wages, provides tax relief for the working and middle classes, and paves the way for repatriation of funds parked offshore back to the United States.

Our current tax code has increased in length and complexity so that 94 percent of U.S. taxpayers needed some form of help to file their returns, according to National Taxpayers Union, and 91 percent of small businesses hired a professional to do their taxes, according to the National Federation of Independent Business. Taxpayers spend over 6 billion hours annually complying with the tax code, according to the IRS’s Taxpayer Advocate Service. Complying with current tax code, one that is six time longer today as it was in 1955, places a $262 billion burden on the economy.

Colorado’s economy depends on 892 U.S. companies that actively operate internationally, competing in global markets on a daily basis for inputs, capital and customers. These globally engaged companies directly and indirectly contributed $148.8 billion to the Colorado economy in 2013, according to a Business Roundtable report. Focusing on tax reform that benefits Colorado workers, is simple and fair, and sets a competitive rate that drive job creation and higher wages is something every Coloradan should champion.

“If we don’t have tax reform sometime this or early next year, a lot of the business investment that’s been predicated on getting tax reform done will have been poorly made,” said J.D. Foster, senior vice president and chief economist at the U.S. Chamber. “Business investment will likely contract significantly, and we will have a significant period of economic weakness in my opinion.”

Our economy is healthy when we grow at roughly 3.5 percent. Since 2007, it has been below 2.5 percent consistently. Significant and generational tax reform is at the core of President Trump’s plan to return to over 3 percent growth. A 3 percent growth rate will yield a nominal gross domestic product that is $16 trillion larger, generate $2.9 trillion in federal government revenue, and raise wages and salaries of American workers by $7 trillion, according to administration estimates.

Fixing our broken tax code for families, small businesses, workers, and job creators is the single most important action we can take to grow our economy and help the middle class get ahead. If we are successful in this once-in-a-generation opportunity to make taxes simpler, fairer and lower for hard-working Colorado families, we can encourage entrepreneurs to reinvest in their businesses and American companies to bring back jobs and profits trapped overseas.

“CEOs overwhelmingly believe that tax reform is the most effective way to put more Americans to work in a stronger, growing economy. The Trump administration’s recent release of its tax proposals was a significant step forward as they work with Congress on pro-growth reform legislation. By demonstrating the importance of tax reform to business and the U.S. economy, these survey results confirm that tax reform is a critical priority if we are to grow the economy and create jobs and opportunity,” said Business Roundtable President and CEO Joshua Bolten.

Colorado Business Roundtable strongly encourages our congressional delegation, leadership and the administration to pass meaningful and permanent tax reform. If you are interested in joining business leaders, chambers and associations in advocating for a fairer, simpler and more competitive rate, please contact us at jwasden@cobrt.com

Jeff Wasden is president of the Colorado Business Roundtable, which describes itself as an advocate for proactive, pro-business legislation that strengthens the economy and allows businesses to grow and thrive in Colorado and the region.

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