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Q&A: Taxes

December 15, 2017
Senator Chuck Grassley , Dysart Reporter

Q: What's driving tax cuts to the finish line?

A: Congress is reforming the federal tax code to deliver fairness, simplification and relief. We have a once-in-a-generation opportunity to overhaul a complex tax regime that is over-sized, over-reaching and overwhelming to millions of taxpayers. Since the last major re-write in 1986, tax compliance presents a growing burden on individuals, farmers and small business owners year after year. Considering that it takes the IRS more than 70,000 pages to explain the tax code, it's not surprising that millions of Americans pay tax professionals to file their federal taxes. Letting working families keep more of their hard-earned money allows households to save, spend and invest more of their own income. Congress can do more to grow the economy. How does cutting taxes help foster economic growth? Lowering taxes on wages, investment and business income triggers productivity. It frees up capital to fire up the economy. For example, reducing the corporate tax rate will make U.S. businesses more competitive, unleashing resources to hire more workers, raise wages and increase spending for research and innovation. On top of that, corporate tax reform will encourage businesses to bring foreign-made profits back home and invest here in the United States. These key reforms will drive up wages and pump up prosperity on Main Street when corporate profits return to local economies and workers' paychecks.

Q: Why are critics of the Tax Cuts and Jobs Act opposed to tax relief?

A: That's what millions of American taxpayers, including hard-working families in Iowa, would like to know, especially every year on April 15. Big spenders want every penny of revenue they can get to grow the government's reach and influence in American society. Taxes will never be high enough to satisfy their appetite. Those of us who believe in limited government, economic freedom and fiscal responsibility know that Washington has a spending problem, not a revenue problem. Critics who scorn tax relief and scoff at its effectiveness to spur economic growth are harming the ladder of economic mobility. Referring to tax relief as "Armageddon" reveals disdain for hard-working Americans who take home less pay because the government takes a bigger bite out of paychecks. Let's be clear about the criticism denouncing tax relief. The U.S. tax code is progressive. That means higher-income earners pay higher rates. In fact, the top 10 percent of earners pays about 70 percent of the federal income tax. Our tax relief plan will free up more savings for middle class families by doubling the standard deduction and increasing the child tax credit. The non-partisan Tax Foundation found that the Senate bill would create an additional $1.26 trillion in federal revenues and increase GDP by 3.7 percent. Don't forget, a robust economy creates more revenue to finance public services and public infrastructure for the American people. And, growing the economic pie gives more Americans opportunity to enjoy a bigger slice of prosperity. The House and Senate are working to reconcile their versions of tax relief legislation. We are working to deliver tax relief for the American people by the new year.

 
 

 

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