At Heritage, we believe fundamental tax reform is necessary to strengthen the economy.

Last week, the Senate Budget Committee released its long-awaited fiscal year 2018 budget resolution, which paved the way for comprehensive tax reform. Read through six takeaways on the budget resolution on The Daily Signal here >>

Republican Study Committee (RSC) members believe Congress must deliver on tax reform by eliminating distortions and creating fairness in the tax code. The budget resolution paves the way for tax reform. Now the question is, how will that tax reform be done?

On Tuesday, RSC members tackled this question here at Heritage. Heritage experts facilitated the conversation as the RSC members discussed a path to comprehensive, pro-growth tax reform. Hosting the discussion was President Edwin J. Feulner, and moderating was tax expert Adam Michel.

Watch a video recording of the event here >>

Rep. Mark Walker, Chairman of the RSC, began the discussion with a strong statement on tax reform:

“The concept of hard-working Americans keeping more of not government money, but their own money, should not be a position that is foreign or offensive.”

The long awaited tax reform outline released by the Trump administration and Republican congressional leaders aims to fix our broken tax code.

If passed, the proposal would grow the economy, create jobs, and increase wages for American workers.

Wesley Coopersmith, Policy Manager at Heritage Action for America, detailed the myths and facts of this pro-growth tax reform.

Here are the ways he believes this reform would benefit American taxpayers:

1) Lowering and simplifying individual tax rates for all Americans,

2) Cutting taxes for large and small businesses alike,

3) Permitting tax-free entrepreneurship,

4) Ridding the tax code of special interest hangouts, and

5) Ending the practice of double-taxing overseas profits made by U.S.-based companies who want to invest in America.

Read through the misconceptions and realities of tax reform here >>

The last time tax reform happened was during the Reagan administration. We should not let this once-in-a-generation opportunity be missed.

What would you most like to see reformed in our tax system?

Comments (47)

Tom Korbutt - October 8, 2017

Flat Tax One Page & Reduce the IRS
Ranks and Managemernt

Nicholas Pasquine - October 8, 2017

Would like to see the 47% start contributing.

phil steinberg - October 8, 2017

Get rid of the estate tax,we pay when we earn the $ and pay again when we die what was already taxed.The tax accountants and estate attorneys are making big profit on this double taxation and decreasing $$$ for the Pvt. sector. Possibly the #1 most UNFAIR TAX.

Marv. Rohrs - October 8, 2017

If the personal income tax part of the reform plan is enacted as currently proposed, it could very well become an albatross around the neck of the Republican Party in much the same manner as the “Affordable” Care Act has become one for the Democratic Party.

It certainly is not “for the common good” as an influential member of the Ways And Means Committee is reported to have remarked. If true, that remark could very well indicate one of the most calloused attitudes on record.

Taking away the medical expense deduction is not the fair way toward simplifying the tax code. As of 2010, over 8 million taxpayers itemized using that deduction. On a per person basis taking it away will have a far greater financial impact ON THEM than any other deduction on OTHER taxpayers, and it would be a stab in the back to many who are ALREADY overwhelmed by serious medical problems and associated huge catastrophic medical expenses.

The impact of this on them can be an INCREASE in their taxes of $10,000 or more.

When they file their taxes and finally recognize what the GOP has done to them, they will likely retaliate at the voting booth, as I will do.

Emily - October 8, 2017

bring company,s back due to lower taxes.
simple tax forms for everyone..

Chet Wanvig - October 8, 2017

We need to extremely simplify the tax calculations and eliminate the plethora of credits and deductions.

Fred Baldwin - October 8, 2017

I would be in favor of eliminating the income tax altogether and going to a consumption based system which would require every consumer to finance the Federal Government.
Since politicians would not be able to manipulate such a system, they would never consider such fairness to and for our country.
Given the reality of how embedded the Washington “swamp” is, my second choice for tax reform would be a flat tax where everybody pays a percentage- no exceptions and no deductions.

Harry Record - October 8, 2017

Remove AMT and the Obamacare surtax on our retirement income. Then eliminate the estate tax without removing the step up in basis – most of that is from inflation anyway, over which we have no control.

Make it fair and simple!

ALLEN SIMON - October 8, 2017

I did not see any mention of capital gains. Is the plan to eliminate this “loophole” or to keep things as they are, or to stop double taxation by making them not reportable as income?

I believe the statistics show that every time the capital gains rate has been lowered the capital gains income to the govt has increased. But more importantly capital gain by shrewd investment is the best way for middle America to climb the ladder of success.

Albert (Alberto) Castro Jr - October 8, 2017

I would like to see the IRS reformed out of existence.

Phyllis C. Goodwin - October 8, 2017

I think if we were to get rid of the loop holes that the average taxpayer is not privy to, it would go a long way in helping to grow the economy

William CHAMBERS - October 8, 2017

Return real power to the people by eliminating the income tax system completely – THE FAIR TAX is the BEST way to go…….

Richard H. Crosby - October 8, 2017

Eliminate corporate taxes! Bring the $$ home. Eliminate the inheritance tax! Establish an investment tax requiring a % purchase of capital goods by busjness’s capable of investment, and for R&D by large tech companies. 10% MAX.SALES tax at all levels. Fed taxes states. States tax contiguous regions. Counties tax municipalities. They tax individual & local corporate purchases. Restrict exemptions!

Ann Longacre - October 8, 2017

I’d like to do away with the IRS and all its bureaucracy. If we had a federal sales tax like states have that is based on percentages, it would do away with mountains of paperwork and fraud, especially from politicians. The wealthy would still pay more since they are the ones buying the big ticket items. Lower income people would pay less–they do that with the state sales taxes. It would be a simple system.

Brenda Strauch - October 8, 2017

No estate tax. Minimal capital gains. Permanent rule against any taxpayer money to promote or to fund abortion in any way. Generous deductions for school choice (along with eliminating the Department of Education.) Scale back the IRS to a clearing house between taxpayers and the Treasury. Require welfare recipients to pay taxes on their “income” with the rest of us. And get a dialogue going on eliminating the income tax entirely as it is arguably unconstitutional.

Dean Hansen - October 8, 2017

My primary concern is that Congress NOT modify or change the step-up basis provisions that have long been part of the Tax Code. That is, when a person dies his/her heirs get a “step up” to date-of-death value in the decedent’s capital and depreciable property, regardless of what the decedent had paid for the property and regardless of any lifetime depreciation deductions. This has saved the beneficiaries of small estates (not just the wealthy) a lot of money when they finally sell the property. In about 1976 Congress tampered with this provision, but very thankfully later changed the law back to what it had been, thus continuing the step-up.

Carole Van Zandt - October 8, 2017

Eliminate required minimum disbursements from our pre-tax retirement plans we worked and saved for over the years. We will gladly pay taxes when we withdraw funds but it should be based on the retiree’s needs, not to satisfy an arbitrary government taxation schedule. Let us keep more of our hard earned retirement nestegg.

Charles Kimball - October 8, 2017

Simplicity of filing the 1040 tax form..

Joseph Yost, Jr. - October 8, 2017

To have true tax reform we should do 2 things.
1st we should scrap the current tax code(including repeal of the 16th amendment) and replace it with the FairTax. All the discussion on who pays taxes is naive – the only one who pays taxes are the consumers. All taxes are in the price of goods purchased or in the form of Govt taxes taken from the consumer before they get it; so in essence it is paid by the consumer. The FairTax is totally transparent, business tax at zero so US businesses will be competitive on the world market and at home because imports will pay the same sales/consumption tax as domestic businesses. This will do all the things that tax reform is touted to do. Simplify the tax system, promote smaller Govt(No IRS and minimize all the agencies that support it), and grow the economy along with all the other cited tax reform benefits.
2nd we should set a cap on Govt spending to 15-20% GDP(The Avg for the last 100 Years) as it was defined before the Obama Administration changed it to make it look like the Govt was spending less as a % of GDP.
Anything else is a charade

Tom Buck - October 8, 2017

As a CPA who has specialized for over forty years as a tax advisor, preparer and, most importantly, as an advocate for taxpayers, I feel strongly that our next tax code should put me out of business. The burdens of our present IRS code are so onerous that we are increasingly in danger of our “voluntary” system blowing up in our faces. If many more of our fellow citizens should decide to cease being “volunteers” the size of the IRS would never be large enough to allow for enforcement.

The one thing I never seem to hear when we are told we might be able to file our returns on a post card is this: businesses will still have to keep books sufficiently detailed in order to calculate taxable income on the business. This seems to be one area that would be difficult to symplify.

Of course congress would have to eliminate social welfare programs from the tax code (also all of the non-tax tasks they are regularly assigned – such as administering Obamacare). If the IRS could concentrate on taxes alone,we might hope to see “service” become a priority. Most taxpayers would be much better able to comply with the tax code if the IRS had the time and person-power (I do detest having to write in PC) to help them understand the requirements.

Judy Baker - October 8, 2017

The Fair Tax (HR- 25) is the way to totally reform the tax system. It takes power away from the politicians and lobbyists and puts it back in the hands of the people

Millard MacAdam - October 8, 2017

Get rid of the estate tax and the “Excessive special retirement, expense accounts and health program privileges which our National elected politicians have continued to provide for themselves far above those received by the citizens they are suppose to be there to serve, not unfairly take from the taxes we all pay as citizens.

I also urge our elected officials to include a fair and reasonable “patient accountability” set of standards as our health care program is enhanced. Patients as well as doctors, hospitals and other health care institutions need to all be accountable for the things they do. Patients need to be accountable for the things they overtly do to destroy their health like take into their bodies illegal drugs, excessive alcohol, or other things WITHIN THEIR CONTROL which have been proven to severely damage their health. We the people should not have to fork out OUR tax dollars to those who fail to do what is right and responsible to maintain their personal health. PERIOD!

Ruth Gregg - October 8, 2017

Reform or eliminate the IRS and their ability to use their power to take property from people whom they consider guilty until proven innocent, yet allowing their own employees to avoid paying the tax they have owed for years.

Robert Hahn - October 8, 2017

The income levels for each individual income tax brackets have not been identified in the proposed tax plan. Without such identification, the average middle-class taxpayer is UNable to assess how the resulting tax would be compared to the present.

ALSO: I am NOT happy to lose my income tax deductions: 1) Medical expenses; 2) Property taxes; and 3) State income taxes. For my kids, hopefully the mortgage interest deduction will be retained.

While the advertised “doubling” of Standard Deductions seems could be beneficial, in the same breathe each person’s “personal exemption” would be eliminated, thus largely cancelling-out the increased Standard Deduction. One hand “giveth”, yet do not forget to look for the other hand that “taketh away” at the same time.

ALSO: It is deplorably INequitable that 50% of “income earners” pay no taxes ! ALL income earners must have “some skin in the game”, E.G., at least $ 100 annually.

ALSO: ELIMINATE the “tax credits” for ILLEGAL ALIENS ! They are not citizens ! They are INeligible for Federal benefits. Do NOT pay them for such.

Joanne Kensinger - October 8, 2017

Godspeed to all involved in tax reform efforts.

Domingo - October 8, 2017

I think the income tax is just a wealth distribution. scheme. Too many credits are built into the system. Earned income credits and child care credits, for example.
There has to be a way to stop the corruption by some people that file dishonest returns. For example, the way dependents are claimed by some filers.
The mom and dad split the dependents and file in a way to take advantage of the different filing status.
Why not make it so simple that people can do their own returns if there has to be an income tax?

Joanne Kensinger - October 8, 2017

A flat tax would be good.

Larry Becker - October 8, 2017

Retain the deduction for charitable contributions and eliminate the alternative minimum tax. Eliminating deductions for charitable donations would have some negative impact on charitable organizations which provide many services to the people of the United States and needy people all over the world. And eliminating the AMT would have some positive impact.

Kim Broby - October 8, 2017

Flat tax, that way everyone is assessed the same. That way the burden is the same.

G. ALLAN BARNES - October 8, 2017

Multi layers of taxes where everyone piles on, like buying a house.
Estate/death taxes, where even in death, the truly greedy have to get their “cut”.
“Middle class” tax reform can be translated into what most of the population that has to pay for by losing THEIR tax deductions. When Reagan past tax reform, I lost about a grand off my tax returns and had to pay taxes on my military time towards retirement.
Defacto taxes like ones that come when they eliminate tax on food, like CRV. Allegedly for recycling/ environment, but goes to neither.
Social security gets taxed after it has already been taxed.
Welfare should be taxed, but they’d probably get COLA to compensate them.
The rich and well connected have always been able to game the system so tax reform is code for making people who can LEAST afford it to pay for those who CAN.

John Moore - October 9, 2017

Fairness to the “other than wealthy/super wealthy. DO NOT TAX THE “POOR TO THE BENEFIT OF THE “UPPER CLASS WEALTHY!

Roger Daigger - October 9, 2017

I would like to see a sales tax only. Nothing else. No IRS, No tax attorneys. No capitol gains. No estate taxes. No tax on businesses. No filing of income tax at all. If you buy nothing, you pay nothing. Savings accounts would skyrocket. Everyone could plan their future much better.

Jeannette R. Bateman - October 9, 2017

Repeal of the death tax.
Repeal of the capital gains tax for people
65 yrs. old or older.
No tax on corporations–only tax the salaries of people who earn money from
them or shareholders incomes.
A flat tax of 10% for all for people earning
over $35,000. a year.
A reduction of the many, many taxes on
every little thing. The list is long and forever growing.
No more taxes on Social Security Disability or Retirement as that is double
taxation.
The only people who should receive social security benefits are those who have paid into it. There need to be other
programs for people in need who have
never paid into Social Security.such as the state funded disability programs that
existed years ago. Another possibility wouldf be a nationwide sales tax on new
items only– not on the purchase of new items.
Eliminate the IRS.
No tax payor funding of planned parenthood.

Thomas F Stark - October 9, 2017

Why do we continue to tinker with “tax reform” but ignore the elephant in the room. Until we scrap the income tax completely and shift to a consumption tax we continue to tax productivity instead of consumption. By making that change, we encourage saving and sensible spending because the less we spend the less we are taxed. Meanwhile, those evil rich people (sarc) who have tons of disposable income will spend more than the “average joe” and therefore pay more in taxes. The blueprint has been available for decades. The thing that seems to be stopping it is that the politicians lose all their ability to use loopholes and carve-outs to favor their big donors. Wouldn’t that be nice? Perhaps fewer would become career politicians.

Richard (Rick) Holman - October 9, 2017

Eliminate the IRS! Go to a FAIR Tax.

I understand that the individual tax brackets will be reduced to 3, but have seen no definition/limits of the brackets?

Andrea Trundle - October 9, 2017

Get rid of the REFUNDABLE credits as this is just entitlement in taxes and not through HHS. Or limit REFUNDABLE credits to$2000 and not these $6000-$16000 tax refunds when they did not pay any taxes to begin with!
A National Tax only after abolishing Individual Taxes. Otherwise we end up with both!

James Hauser - October 9, 2017

I would like to see a “real” reduction of out of the pocket taxes not just a reduction of “tax rates” then removing the deductions. I am 75 years old and EVERY time I have received a “tax reduction” it has cost me more money. It is not a tax reduction if you put a “reduction” in my right hand pocket and then take it back again, and more, from my left hand pocket. The American people have been lied to and taken to the cleaners by Washington too long. Let’s have some truth in what is being offered as a tax reduction. I concur with Albert Castro Jr: I would like to see the IRS reformed out of existence

Michael Orr - October 9, 2017

Eliminate IRS, Estate Tax and other double taxes.

Nancy McKnight - October 9, 2017

Eliminate the estate tax!
Reduce taxes so small businesses can stay in business!
Decrease the number of child exemptions to two!

Michael Horey - October 9, 2017

Along with TAX REFORM, benefitting the citizens of the U.S., we need a complete and total “REFORM” of the I.R.S.. Clean out the corrupt leadership. Remind the employees of the I.R.S. that they work for us, “THE CITIZENS OF THE UNITED STATES”, and we pay their wages! They are not a political party who decides who to “LIKE” and who not to “LIKE”!

Dion Kendrick - October 9, 2017

Two words: Flat tax.

Michael Ysrael - October 9, 2017

there is no such thing as a “fair tax”. Taxes are extractions by the Government to pay for services. They all suck, but are a necessary evil.

The problem is we started out as a republic of States. Thanks to the passing of the 16th Amendment, we strengthened the Federal Government beyond the intentions of our founders and destroyed the States.

the bulk of taxation must return to the States. The federal budget as passed by Congress should be allocated back to the States. It will then be up to the States to craft tax laws that fits their particular economy. We return to the concept of States being the experimenters.

this in turn will return power to the individual; where it always belonged. If you don’t like the government/taxes of one State, the individual has the freedom to move to another State with laws more suitable to their situation. When dealing with the Fed Gov., there is no choice by the individual. This makes the Fed omniscient

States will have to compete for the hearts and minds of individuals. Oh, and as a bonus, if the Fed budget is too large, 50 States are left to duke it out, not 350,000,000 people with no power on an individual level. Even the smallest State will have a big say.

Then, while we are repairing States to their rightful place in the Constitution, we should also repeal the 17th Amendment. The purpose of the Senate was to represent the interests of the State Governments. The people of the State have Congressmen has their representative. The 17th turned Senators into “super congressmen”, with no representation of States in the Fed Government.

Colleen Waugh - October 10, 2017

To simplify the tax code. Lower the tax rates in each bracket. Lower the corporate tax rate. Suspend for a period of time, the taxes businesses must pay to bring their businesses, its income and the workers employed back to the U. S.

Stephen Eldridge - October 10, 2017

The GOP plan would increase the already lethal level of over 50% of the people (eligible voters) who pay ZERO Income Tax, and ZERO SS/Medicare “tax” (after offset by Refundable Tax Credits, or “RTC’s”).

In addition, many people also receive tax refunds that are attributable solely to RTC’s (i.e., not to tax withheld) that exceed all Income Tax and SS/Medicare “tax” liability (i.e., they receive “tax welfare”).

The plan increases the non-taxpaying group, primarily, by nearly doubling the Standard Deduction to $24,000 for a couple. Noted economist Daniel J. Mitchell also warns of the danger of increasing the number of non-taxpayers.

We must insist that Congress instead begin to reverse this disturbing progression that has been taking place over many years, or else taxpayers will become an absolute and helpless minority that will be slaughtered

Mona - October 10, 2017

We need a simplified tax form. Eliminate all those gosh awful credits and debits. We need tax reform for corporations to boost the economy and create jobs, which will also increase the number of people paying taxes.
Tax reform needs to encourage people to plan for a secure retirement by not taxing capital gains.
There is also a problem with the Earned Income Credit, as many recipients spend this “windfall” on luxury items instead of using it for necessities. (Maybe they don’t need it for necessities, since they receive housing assistance, food stamps, free medical, etc…)

David Kennedy - October 10, 2017

When I retired over 22 years ago, Social Security gave us seniors a Cost of Living Adjustment (COLA), but no longer. Unless it is restored, we do not have enough income to keep up with the ever rising costs of necessities.

Rebecca Maish - October 10, 2017

Taxes are necessary to fund civil infrastructure for the health and safety of any population. That said, INCOME taxes are in opposition to a self-governing, free society. INCOME taxes foster the degradation of individual and then societal psychological, class, economic, national, privacy/liberty, and spiritual well being.

Don’t tinker around the edges of a philosophically doomed system. Pass the Fair Tax (HR 25) and free the American people from the last 104 years of slavery.

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