Congress is working on a tax reform proposal that will govern the lives of millennials for years to come. It is important that Congress get it right.
The last time the tax code was subject to a massive overhaul was during the presidency of Ronald Reagan. Expect this to be the last opportunity for tax reform for the next 30 years. This tax reform will impact 20-somethings far more than the 60-somethings drafting up the legislation and millennials should be engaged in how this legislation is drafted and implemented.
This tax reform should end up resulting in an expanding American economy with better, higher paying jobs for young people. This reform should give people just entering the job market hope for the future. Thanks to previous generations, young people are on the hook for $20 trillion in national debt, this tax reform should give our nation hope that there is a pathway forward to both shrink government while cutting taxes.
President Donald Trump has proposed some controversial policy changes in his first 100 days, but his idea to cut taxes will be great for young people looking for jobs. It will lower taxes on young people who frequently are in lower paying jobs and just starting a career. While this legislative battle will be fought out between lobbyists for different special interests, who will be looking out for the interests of young people who will be spending the next 30 years paying personal income taxes?
Our high taxes on corporations encourages them to reorganize outside of the United States to avoid paying far too much. This encourages corporations to organize outside of the United States and disadvantages American companies who have to compete with foreign corporations that pay lower taxes and get massive subsidies from government.
The Border Adjustment Tax (BAT) is one idea that will end up helping to convert our tax system into one that benefits young people with more jobs and a more choices on where to work. The BAT is a tax that is imposed on imports, but not exports. Goods made in the United States are not subject to the tax because those goods are already hit with taxes by foreign governments and taxing goods being exported would depress the manufacture of exports. Goods made abroad would be subject to a tax to make sure that those goods were taxed so that foreign corporations would be able to avoid taxation. This would encourage the manufacture and purchase of American made goods.
This idea would be married to a massive cut in the corporate income tax which is the highest in the world today. With both a cut to the corporate income tax and a BAT, corporations would be encouraged to stay in the United States. The practice of U.S. corporations reorganizing n foreign lands would end. Jobs would come home and young people would have more jobs.
Congress is in the process of debating the future of Obamacare and may raise the debt limit. The Senate is focused on confirming President Trump’s nominees, while the House has been dismantling may of the economy killing regulations propagated by President Obama. Yet the most important debate Congress will have this year is the fight over simplifying and cutting taxes. Congress needs to get that reform effort right.
Lowering the corporate income tax while imposing at BAT would be a great development for the young. And it is time for Washington to look out for young people.