President Trump gave a speech on Wednesday from Springfield, Missouri calling for tax cuts for companies and American workers and includes reform efforts with the U.S. tax code which hasn’t been undertaken in 31 years but his ambitious fiscal policy proposals lacks specifics and faces large hurdles down the road.
Claiming that he was in Springfield Missouri “to bring back Main Street” and telling his audience that they are “seeing it happen right now,” President Trump spoke about the need to reduce the “crushing tax burden” on companies and American workers.
Later in his speech, President Trump connected the “renewal of prosperity” and the “restoration of opportunity” to reducing the tax burden on companies and workers.
Speaking in populist terminology that sounded at times like it was borrowed from a Bernie Sanders speech, President Trump called for the need to eliminate special interest loopholes benefitting “deep pocketed” special interests and simplify the U.S. tax code that now spans 2,600 pages which he claimed isn’t understandable.
“The tax code is now a massive source of complexity and frustration for tens of millions of Americans” President Trump said.
After stating that 90 percent of Americans need professional help to do their taxes, President Trump said that the current tax code disadvantages ordinary Americans who don’t have an “army of accountants” while it benefits deep-pocketed special interests.
President Trump said that America needs a competitive tax code that creates more jobs and higher wages for Americans, although few details were offered for his ambitious goal.
Blaming Democrats for obstructing tax cuts and tax reforms while adding healthcare reform and his administrative appointments to his blame list, Trump said that the strategy of America’s rivals has worked successfully by lowering their taxes.
President Trump repeated his claim that companies in the U.S. are paying high taxes “way above 40 percent when you include state and local taxes” and said that the U.S. is behind France, behind Germany, behind Canada, Ireland, Japan, Mexico, South Korea, and many other nations.
Neglecting to mention that many large U.S. corporations like Alphabet, Apple, ExxonMobil, and Microsoft have benefited from tax loopholes and pay far less than 40 percent in taxes as Forbes wrote in April 2017, President Trump said that his administration is “going to fix that” and they are currently working on NAFTA.
President Trump said he wants to lower taxes for middle income Americans and also bring back trillions of repatriated dollars in corporate wealth parked overseas which he estimates is between $ 3-5 trillion.
Congress approved a 5.25 percent tax rate on repatriated foreign profits under the American Jobs Creation Act of 2004, and the corporate tax rate dropped considerably from the 35 percent corporate tax rate.
Under the 2004 tax repatriation holiday, corporations transferred $362 billion in overseas accounts to the U.S. and the tax savings was mostly used to pay dividends to their shareholders, utilize share buybacks, and purchase other corporations.
Trump Proposes “The American Model”
Claiming that his administration is embracing a new economic model called, “The American Model” President Trump said that under the new system “we will encourage companies to hire and grow in America, to raise wages for American workers, and to help rebuild our American cities and communities.”
Few details were provided about how he plans to execute his ambitious goal of having companies hire, raise wages, and rebuild America, but he said he’s calling on all members of Congress to support his pro-American tax reform.
“If we do this, if we unite in the name of common sense and the name of common good, then we will add millions and millions of new jobs, bring back trillions of dollars, and we will give America the competitive advantage that it so desperately needs and has been looking for for so long. It’s time” President Trump said.
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