House gives final approval to largest tax cut in over a decade
On Thursday, the Alabama House of Representatives passed the biggest income tax cut in the state in over a decade. The bill, introduced by Anniston-Republican and Senate President Pro Tem Del Marsh in January, now heads to the Governor to be signed into law. SB76 will allow more taxpayers to take the maximum standard deduction, and will save families an average of $21 a year. The legislation is part of the Alabama Senate Republican Caucus “Fighting for Alabama” agenda, which was unveiled at a press conference in January. “This is not a tax break for the rich,” Marsh said when he introduced the legislation. “It’s a tax break for working class Alabamians.” According to the Associated Press, the bill, “would increase the adjusted gross income level where jointly filing married taxpayers qualify for the full $7,500 standard deduction from $20,000 to $23,000. The deduction would be lowered as incomes rise. There would be similar changes for single people.” Marsh estimates the proposal will cost the state between $4 million to $6 million. “It is a testament to the Republican Legislature that through smart, conservative management we have been able to guide the state through tough financial times and are now in a place where we can bring tax cuts to the hard-working people of Alabama” added Marsh. “Before the 2017 session started, I began looking at responsible ways to give people a tax cut and I am pleased that we found a way to provide this much deserved break for the people. I will fight for this reasonable tax cut until it is passed by both chambers and is signed by the Governor.
Bradley Byrne: A tax cut for working families
A lot has changed in our country since 1986. Ronald Reagan was President, Top Gun was a hit at the box offices, and Matlock had just premiered on television. One thing that hasn’t changed since then? The tax code. 1986 was the last time we had meaningful tax reform in this country, and that is a shame. The current tax code does not match the realities of today’s economy or the needs of modern Americans. Thankfully, a new tax code is on the horizon. Last week, President Trump and Republicans in Congress unveiled our framework for a new, simplified tax code. Under our framework, Americans will keep more of their hard earned money in their pockets, small businesses will be encouraged to grow, and the economy will have what it needs to finally experience real growth again. President Donald Trump put it best when he said that “it’s time for Congress to provide a level playing field for our workers, to bring American companies back home, to attract new companies and businesses to our country, and to put more money into the pockets of everyday hardworking people.” That is exactly what our plan would do. First, our plan would move from the current seven tax brackets to essentially four brackets: 0%, 12%, 25%, and 35%. The 0% bracket would result from doubling the standard deduction to $24,000 for married taxpayers filing jointly or $12,000 for single filers. This change is fundamental to a fairer, simpler system. Additionally, our plan calls for the elimination of special interest tax breaks that primarily only help the well-connected and elite. A complicated tax code full of loopholes and confusing provisions does nothing to benefit the average American family, and we must make things as simple as possible. Importantly, our plan will maintain important tax incentives for home mortgage interest, charitable giving, retirement, and education. The plan also increases the child tax credit to make it available to more working families. With these changes, our plan will allow for a simple “postcard” tax filing for the vast majority of Americans. It will no longer take you countless hours or require you to hire outside help to simply file your taxes. As President Trump has said, these changes will result in a “Middle Class Miracle.” Hardworking people across American will have more money in their pockets, which they can use to benefit their family and spark greater economic growth. Our plan also includes a provision important to family farms and small businesses. By repealing the estate tax, also known as the death tax, we will no longer punish families when someone dies, and they want to leave their business or farm operation to a loved one. Sadly, some on the liberal left has already started spreading false and misleading information about our pro-growth tax plan. I want to ensure you that our tax plan is designed with working Americans in mind, first and foremost. In fact, a key goal of our plan is to eliminate provisions that only benefit the well-connected and well-off. Over the coming weeks, I will continue to share more information with you about how our tax plans will spur economic growth and benefit American families. Next week, we will take a look at how our tax plan will open the United States up for greater economic competitiveness on the world stage and bring jobs back to our country. In the meantime, I encourage you to read the tax reform framework for yourself online at FairAndSimple.gop. As you legislative process moves forward, I welcome your input and feedback. It is time we get the job done and give Americans the tax cuts they deserve and revitalize the American economy. • • • Bradley Byrne is a member of U.S. Congress representing Alabama’s 1st Congressional District.
William J. Canary: The timing for tax reform is right
Congress returns to Washington facing enormous challenges. These include passing a domestic tax cut that is important for this and future generations. President Donald Trump has suggested a tax cut to reduce the unbelievable domestic income tax rate for corporations, including manufacturers, of 39 percent, to a competitive 15 percent. In addition, Congress must lower the tax rate for the two-thirds of manufacturers that pay taxes at individual tax rates as pass-through entities. The pass-through rate on small business owners can be as high as 44 percent, according the National Association of Manufacturers. These small businesses are the backbone of our economy and create the majority of jobs. A 2015 NAM study concluded that a reform package like this could add more than $12 trillion in Gross Domestic Product over 10 years, deliver more than 6.5 million jobs to the U.S. economy, and increase investment by more than $3.3 trillion, NAM Chairman David Farr said in a recent speech to the Economic Club of New York. (Farr is chairman and CEO of Emerson, a global manufacturer.) Combined with overarching regulations, the burdensome tax rate makes it harder for manufacturers to meet intense competition for business and jobs. A tax rate of 39 percent – higher when you throw in state and local taxes – is a crushing obstacle when competing against manufacturers in the top 35 industrialized nations who enjoy a tax rate, on average, half that of the United States. A tax cut will create jobs for Alabama manufacturers that compete internationally against lower tax rates. This nation’s bountiful resources, which include willing investors and hard-working men and women (a recent study showed that Americans are among the hardest-working in the world), can be stifled by a non-competitive tax code. The timing for tax reform is right. As the market is proving, businesses and individuals have been investing in anticipation of a tax cut and its effect on manufacturers, jobs, and our families’ standards of living. ••• William J. Canary is president and CEO of the Business Council of Alabama, the state’s exclusive representative of the National Association of Manufacturers and the U.S. Chamber of Commerce.
