WASHINGTON—The White House and GOP congressional leaders yesterday released the details of their tax reform framework. The proposal aims to “achieve pro-American, fiscally responsible tax reform,” according to a statement from the White House. Described as a “uniformed framework” by proponents, the plan attempts to “deliver fiscally responsible tax reform by broadening the tax base, closing loopholes and growing the economy.”
“This is a once-in-a-generation opportunity, and I guess it’s probably something I can say that I’m very good at,” said President Donald Trump at a tax reform event yesterday in Indianapolis. “I’ve been waiting for this for a long time. We’re going to cut taxes for the middle class, make the tax code simpler and more fair for everyday Americans, and we are going to bring back the jobs and wealth that have left our country—and most people thought left our country for good.”
Highlights of the framework include the following: shrinking the current seven tax brackets into three, 12%, 25% and 35%; doubling the standard deduction and increasing the child tax credit; eliminating itemized deductions primarily used by the wealthy while retaining tax incentives for home mortgage interest and charitable contributions; repealing the death tax and the existing AMT; limiting the maximum tax rate for small and family-owned businesses to 25%; reducing the corporate tax rate to 20%; and imposing a one-time, low tax rate on wealth; and more.
Industry association leaders have already responded to the proposal. Katherine Lugar, AHLA president and CEO, applauded the joint framework and recognized the need for swift action. “AHLA is supportive of efforts that allow our industry—and small businesses in particular—the ability to drive the national economy,” she said. “With a strong and continuous record of economic growth, supporting eight million jobs, and three out of every five hotels run by small business owners, the U.S. lodging industry is stronger than ever.”
“AHLA is focused on policies that enable hoteliers to operate on a level playing field and address important issues like tax rates for corporations and small businesses, as well as interest deductibility—to empower business growth, competitiveness and entrepreneurism. We also believe our guests will benefit from lower individual tax rates, which will give them more disposable income. Enacting smart and effective tax reform will allow businesses, families and individuals to be even stronger.”
AAHOA President and CEO Chip Rogers reminded the industry that the last time the code was reformed was in 1986, and since then, the tax code’s been a “bloated job killer” for the economy. “For far too long, politicians across the political spectrum have dreamed up every excuse imaginable as to why they need to take more money out of the pockets of the people who earned it,” he said. “Now is the time to reverse course and move forward with tax cuts for every American. A growing economy leads to individual independence and a realization of the American dream. We applaud the effort to reform our tax code in a manner which provides both tax cuts and simplification. We urge Congress to set aside their differences and deliver for the American people.”