By Don Weaver, South Carolina Association of Taxpayers
DISCLAIMER: This column is an opinion contributed by Don Weaver of the South Carolina Association of Taxpayers. The views expressed in this opinion do not reflect the views of Midlands Anchor. Rebuttals are welcomed.
With tax day now behind us, it is worth reminding the taxpaying public and federal lawmakers of the woeful state of the American tax code. For starters, Congress hasn’t significantly reformed the tax code in more than 30 years. Taxes on American businesses are now almost double that of our international competitors, with some small businesses paying as much as 44% of their earnings in taxes. All of this places an incredible strain on the American economy and families across our nation.
Added to the high tax rates levied by the federal tax code is a broken system of taxing imports and exports. When products made in South Carolina or elsewhere in the U.S. are shipped overseas, they are burdened by heavy taxes. When goods enter through Charleston or other ports from foreign producers, they are taxed little or nothing. This uneven playing field hurts businesses here at home and creates incentives for U.S.-based businesses to consider moving overseas.
The good news is that a plan proposed by House Speaker Paul Ryan and House Ways and Means Chairman Kevin Brady holds the potential to fix our outdated and misaligned tax system. Their comprehensive blueprint for tax reform, called “A Better Way”, includes a number of provisions that would provide immediate tax relief for businesses and families. Chief among those is a reduction in the corporate tax rate to just 20%, bringing the U.S. in line with our competitors. Taxes for smaller businesses would be lowered to 25%, the lowest rate since World War II.
Combined, these initial measures would provide immediate and meaningful relief to taxpayers. In fact, the Tax Foundation estimates that the House tax reform blueprint would represent a $2.4 trillion tax cut over its first decade of implementation. The impact on South Carolina is equally impressive. The blueprint is estimated to create nearly 24,000 jobs in our state and raise the after-tax income for South Carolina families by an average of more than $4,000 per year.
The House tax reform blueprint plan also works to level the playing field for imports and exports. Through the use of border adjustments, the blueprint helps ensure that goods produced in South Carolina are taxed on an equal basis with those made in other countries. This issue of fairness is critical to businesses like Boeing, one of our state’s largest employers, which in recent days has affirmed their support of border adjustments and advocated for the sweeping tax reform represented in the blueprint. Boeing believes, as does the South Carolina Association of Taxpayers and leaders such as President Trump, that kickstarting the American economy begins with leveling the playing field for international commerce.
The time is now for members of Congress to stand up for reform of our outdated federal tax code. By doing so, they will bring meaningful relief to the families and businesses that call the Palmetto State home. If South Carolina’s voices in Washington want to grow our economy, they will give the blueprint the attention it deserves.