Is there anything better than a snow storm back home while you’re in sunny Florida, Arizona or St. Somewhere? How great is it looking at your iPhone weather app in flip-flops at cocktail hour smiling at the arctic blast settling in back home? Life is good, right? Makes one want to send a postcard home.
On your way to the post office, you could also mail your tax-returns. In a perfect world–and yours is pretty good in this story–your taxes would be one flat rate; a postcard sized filing, simple enough that your big problem that morning is beating the piss out of your opponents in pickle ball.
One can dream.
The Trump administration is working on new plans for tax reform. But as the Four Horsemen of tax reform stated in their excellent NYT op-ed, the main takeaway from all of this dreaming is to “Keep It Simple Stupid.”
Steve Forbes, Larry Kudlow, Arthur B. Laffer and Stephen Moore, as advisors to President Trump, wrote:
Instead, the primary goal of Mr. Trump’s first tax bill should be to fix the federal corporate and small-business tax system, which has made America increasingly uncompetitive in global markets and has reduced jobs and wages here at home. The White House and the Treasury already have a tax plan that we were involved with last year. The three most important planks of that plan are:
First, cut the federal corporate and small-business highest tax rate to 15 percent from 35 percent, which is now one of the highest corporate tax rates in the world.
Second, allow businesses to immediately deduct the full cost of their capital purchases. Full expensing of new factories, equipment and machinery will jump-start business investment, which since 2000 has grown at only one-third the rate recorded from 1950 to 2000.
Third, impose a low tax on the repatriation of foreign profits brought back to the United States. This could attract more than $2 trillion to these shores, raising billions for the Treasury while creating new jobs and adding to the United States’ gross domestic product.
Corporate taxes are the low hanging fruit of the bunch. Yesterday, The Tax Foundation released their Competitiveness Impact of Tax Reform for the United States with this embarrassing nugget: Of the 43 countries surveyed the U.S. has the second highest corporate income tax at 39.1 percent and the fifth highest tax burden on new investment at 34.8 percent.
On the corporate tax front ours is only lower than Colombia’s. It’s also the highest among OECD members, and a whopping 14.1 percentage points higher than the OECD average.
The best way to move towards simplicity is to be able to explain your tax rate in that text to your loved one’s up north. A good start would be to pick-off corporate taxes right now. It has to be simple.