Tax Reform Toolkit

Over the past few decades, the U.S. tax code has become a significant obstacle to economic growth, job creation and higher wages for American workers.

President Donald Trump, Speaker Paul Ryan and Senate Majority Leader Mitch McConnell made it clear before the November 2016 election that pro-growth tax reform would be a major legislative priority for Republicans in 2017 if they were given the chance to govern. Now that the American people gave Republicans control of the House, Senate and White House, there is a real opportunity to achieve comprehensive, pro-growth tax reform.

A rewrite of the tax code couldn’t come soon enough. It has been far too long since Congress made major updates to the tax code. In fact, the last major reform of our nation’s tax code was under the Reagan administration in 1986, and every major effort since then has failed. After three decades of no major changes to the tax code and a stagnant economy, the time for tax reform is now.

Key Talking Points:

Our tax code currently:

  • Suppresses American business creation and growth. Our high corporate tax rate is a problem for American businesses. The U.S. corporate tax rate of 39.1 percent is the highest rate in the world and reduces domestic investment.  
  • Is far too complex for the average citizen. The individual tax system is a problem for families. In 1913, the tax code was a reasonable 400 pages long, but by 2013 it grew to over 74,000 pages. Americans spend nearly 9 billion hours complying with the tax code every year.
  • Is full of special interests. Pervasive cronyism in our tax code hurts entrepreneurs and consumers. Over decades, Congress has enacted policies that manipulate the marketplace to benefit certain business or industries.

Accordingly, tax reform should include the following principles:

  • Lower and simplify individual tax rates. Tax reforms should aim to improve the simplicity and transparency of paying taxes. Lowering overall rates will allow families and hard working Americans to keep more of their earnings.
  • Lower the corporate tax rate. Congress should lower the corporate tax rate to encourage growth and investment.
  • Permit tax free entrepreneurship: Businesses should be permitted to deduct the full cost of their capital expenses when they incur them, known as expensing, rather than over many years using cumbersome depreciation schedules currently in effect.
  • Establish a territorial tax system. High U.S. tax rates reduce domestic investment by both U.S. headquartered business and foreign businesses, stifling job creation and wage growth.
  • End cronyism. Tax reform should explicitly seek to abolish policies that Congress intended to benefit particular industries or particular groups.

To learn more read the full Sentinel brief available here.

(Make sure to insert the Twitter handle of your Representative)

  • Click to tweet: @MEMBER it’s time for Congress to pass #ProGrowth policies and #TaxReform that allows America to prosper
  • Click to tweet: @MEMBER Americans need #taxreform that levels the playing field and ends special interest handouts. #ProGrowth
  • Click to tweet: @MEMBER tax laws should not favor the well-connected over hard-working taxpayers #TaxReform
  • Click to tweet: @MEMBER our high U.S. corporate tax rates are making American companies uncompetitive. #TaxReform should lower rates.
  • Click to tweet: @MEMBER #ProGrowth #TaxReform should stand up to special interests and serve American taxpayers

General Tweets:

  • Click to tweet: It’s been too long since Congress passed meaningful #TaxReform. The time is now to push forward #ProGrowth policies
  • Click to tweet: #TaxReform could bring back more than $2.6 trillion in profits currently locked out of the U.S.
  • Click to tweet: #ProGrowth #TaxReform would encourage new business investment, job creation and wage growth
  • Click to tweet: Americans spend nearly 9 billion hours complying with the tax code every year, we need to simplify tax code #TaxReform
  • Click to tweet: True #TaxReform must be fair for all hardworking Americans. No more special interest handouts!

These are notes to use when calling your member of Congress. You can find their phone number on the Heritage Action Dashboard.

Hi, I’m [NAME] from [STATE].

It is my understanding that Congress is expected to consider tax reform legislation in the coming months. This effort is long overdue and presents a real opportunity to rewrite tax laws that are currently holding American business back, allowing IRS bureaucrats to pick ‘winners and losers,’ and enabling cronyism to pervade Washington.

Americans should not be burdened to comply with a tax code that is far too complex for the average citizen. By the same token, it is unacceptable that the tax code has been deliberately made more complex by lobbyists to benefit big business, big labor, and big government interests.

America needs tax reform. Reform should provide common sense solutions to the problems facing individual Americans – studies show that Americans spend nearly 9 billion hours complying with the tax code every year, costing our economy over $400 billion in foregone economic growth.

More importantly, business tax reforms are necessary to grow the economy and spur job creation – at an average of 39.1 percent, the U.S. corporate tax rate is the highest in the industrialized world. This rate, combined with the inability of businesses to fully deduct their cost of new capital investment, makes American companies uncompetitive with their foreign counterparts.  

Please tell the Congressman to be aware of these issues when reforming the tax code. Above all, I expect Congressman [NAME] to stand up to special interests and serve American taxpayers and [his/her] constituents. It is time to reform outdated tax laws with a principled approach – to end cronyism, simplify our tax code, and support American business with pro-growth policies.

Below is a sample letter to the editor. We encourage you to adapt and personalize the letter below. Heritage Action Regional Coordinators are always here to help edit your letter and get it published.

Congressman [X],

Today, we have an anti-growth, complex and out-of-date tax code. President Donald Trump, Speaker Paul Ryan and Senate Majority Leader Mitch McConnell made it clear before the November 2016 election that pro-growth tax reform would be a major legislative priority for Republicans in 2017 if they were given the chance to govern.  

Our tax code currently suppresses American business growth, is far too complex for the average citizen, and is full of cronyism. Accordingly, I encourage [you] to stick to the following principles on tax reform: lower and simplify individual tax rates, lower the corporate tax rate, permit “full expensing,” establish a territorial tax system, and end cronyism.

The American people gave Republicans control of the House, Senate and White House, and there is a real opportunity to achieve comprehensive, pro-growth tax reform. Congress can use this as an opportunity to pair tax reform with spending cuts in order to comply with the rules of budget reconciliation and maximize the economic benefits of tax reform. After all, the federal government has a spending problem, not a revenue problem.