The call for tax reform, by both Republicans and Democrats, has perhaps never been louder. Which makes the recent Ways & Means “Plan” for tax reform an interesting study. Its scope is broad, but built on the premise of “simpler, fairer, and flatter.” Of special interest is the recognition and attempt at reconciliation of small business issues.
Rep. Kevin Brady (R-TX) "Our broken tax code is one of the main reasons the United States lags behind when it comes to economic growth, job creation, and competitiveness. Without pro-growth tax reform, our workers and our businesses will continue to suffer. That's why…House Republicans unveiled a blueprint for…tax reform...Our blueprint incorporates some of the boldest, most innovative tax policies available – policies geared toward growing families' paychecks, our nation's small businesses, and our entire economy.... Americans spend far too many hours and dollars just to comply with our complex tax laws. It doesn't have to be this way. Under our blueprint, it won't be. We start with eliminating the maze of special-interest tax provisions that add confusion and keep rates artificially high for everyone. From there, we consolidate income-tax brackets and lower income-tax rates. Finally, we include important provisions to support families, higher education, and charitable giving. Our plan will enable Americans to file their taxes on a form so straightforward it would fit on a postcard."
Rep. Sander Levin (D-MI) “The Republican blueprint on tax reform is long on rhetoric and short on important details. But its general direction is clear: huge, unpaid for tax cuts mostly directed to the wealthy. Everyday Americans will ultimately get stuck with the bill. The [plan] would reduce individual tax rates and dramatically reduce taxes on wealthy individuals. Reduced rates at upper incomes coupled with generous exclusions for capital gains income significantly decrease the tax burden on the wealthiest households, with no relief for hardworking American families. The blueprint would first cut individual rates at the top significantly…On top of that rate cut, the Republican blueprint favors wealth over work by providing a massive 50 percent deduction for an expanded definition of investment income – a huge tax cut on capital gains, dividends, and interest income—effectively lowering the top rate on this income to 16.5 percent. Even though these new rates create a greater incentive for wealthy fund managers to shift their income from ordinary to capital gains income, there is no mention in the blueprint of closing the egregious carried interest loophole.”