Have you noticed our 535 legislators in Washington, DC, all adults, don’t seem to get along with peers of their own party let alone work across the aisle with other adults? Additionally, is it just me or do you also agree our Congressional delegates don’t listen to the constituents they supposedly represent?
For example, regarding the recent tax-reform initiative, advanced predominantly by Republicans, the House and Senate only agree on four of 13 major revisions. Meanwhile, America’s taxpayers want nine other taxation provisions Congress hasn’t even considered.
A disconnect between voters and legislators exists. Let’s examine the facts.
The House and Senate tax bills are identical in four regards: 1) corporate tax rate should be 20 percent, 2) $4,050 personal exemption is eliminated, 3) standard deduction is nearly doubled and 4) the Alternative Minimum Tax is eliminated.
The House and Senate tax bills differ in nine ways: 1) number of individual tax brackets, 2) top individual tax rate, 3) estate tax exemption, 4) the date the corporate tax rate reduction starts, 5) the top pass-through rate, 6) state and local deductions, 7) medical expense deductions, 8) student loan interest rate deduction and 9) child tax credit amount.
One-thousand Democrats, 1,000 Republicans and 1,000 independents (Cohen Research Group) support nine tax reform components our elected representatives have ignored:
First, income from capital gains and dividends is often taxed at a lower rate than income from salary. Fifty-five percent of America’s feel it’s practical that income from capital gains, dividends and salary should be taxed at the same rate; income is income.
Secondly, 61 percent of Americans realize tax rates can be reduced responsibly by eliminating or capping deductions on: 1) charity, 2) mortgage interest, 3) employer-provided health care, 4) property tax, 5) retirement contribution plans and 6) capital gains and dividends.
Third, 62 percent of taxpayers want the corporate tax rate reduced to 25 percent as compared to the House and Senate bills lowering the rate to 20 percent.
Fourth, the current U.S. tax system encourages, in effect, companies to keep profits overseas by putting a double tax on foreign earnings. Seventy-seven percent of citizens understand why companies are establishing overseas headquarters and want to eliminate our double taxation policy.
Fifth, 76 percent of Americans are smart and want to give the 500 largest American companies who hold over $2 trillion in assets overseas an opportunity to bring these assets back to the U.S.A. at a one-time lower tax rate.
Sixth, 75 percent of taxpayers want to simplify the tax code so that tax returns for at least 90 percent of taxpayers would be limited to two pages.
Seventh, knowing there is a $400 billion gap between legally owed taxes and taxes actually paid, 74 percent of Americans want the IRS and law officials to bring-to-court those individuals who are tax dodgers.
Eighth, 84 percent of citizens want our legislators to insure that however the 73,954 page tax code is rewritten, the overall annual tax burden will not increase for lower and middle income families.
Finally, 69 percent of Americans insist tax reform should be revenue neutral. The Congressional Budget Office says both tax bills under consideration will add $1.7 trillion to our already out-of-control $20.4 trillion fiscal debt (www.us-debt-clock.org).
I’m convinced Americans are smarter than many politicians give them credit. And, given the chance, the common, every day street-smart citizen knows how to roll up their sleeves, give and take with people who have different political values, negotiate, compromise and do what is right.
Would it hurt our elected representatives to listen to us once in a while? Who knows, We the People may know what’s best for America’s future, including sensible tax reform.
Steve Corbin is Professor Emeritus of Marketing, University of Northern Iowa, and a 1966 graduate of Nevada High School.