President Donald Trump took his case for tax reform to the American people on Wednesday night – specifically the trucking community. In an event at an airport hanger on the Pennsylvania Air National Guard base in Harrisburg, PA, Trump reiterated his belief that the administration’s tax overhaul will reduce taxes for American workers and businesses alike, and create jobs.
Trump was speaking at an event organized by the American Trucking Association.
“While trucking sustains the vitality of the U.S. economy, we also carry a heavy tax burden, paying the highest corporate tax rate of any transportation mode,” said ATA President and CEO Chris Spear. “That is why we joined President Trump at today’s event, in support of his plan to reform our tax code. We urge Congress to follow the President’s lead and pass tax reform by year’s end.
“Hearing the President specifically call out the benefits of tax reform for ATA’s members and the trucking industry underscores the need for this effort,” Spear added. “We urge Congress to work with the President to achieve the goal of reducing the rates families and small businesses pay in taxes.”
Trump noted that his plan would bring an additional $4,000 to American families as companies bring foreign profits back to America due to the lower 20% corporate tax rate.
“In 2016, American multinational companies kept 71 percent of their foreign-earned profits overseas and away from our country,” he said. “Our framework will totally reverse this, and it’s a very, very troubling trend. We’ll be bringing back, probably, very close to 100% of the money back into our country where it can be put to work, and jobs will be created.”
The plan calls for a one-time tax on money currently sitting overseas. According to the Council of Economic Advisers, this change could bring the average American family an additional $4,000 over eight years.
“My Council of Economic Advisers estimates that this change, along with a lower tax rate, would likely give the typical American household a $4,000 pay raise,” Trump said. “Could be a lot more than that, too. You haven’t heard this. So about a $4,000 amount of money additional for the American family to spend. That’s very exciting.”
Kevin Hassett, who chairs the CEA, explained the $4,000 estimate last week in a speech last week. He said that in the past, workers saw an average 1.1% raise for every 1% increase in corporate profits. Currently, that number is 0.4%, he said.
“In 2016, U.S. firms kept 71% of foreign-earned profits abroad,” Hassett explained. “What would happen if they didn’t do that? A simple back-of-the envelope calculation suggests U.S. workers in 2016 would have received a raise of nearly 1%. What if these firms didn’t do that for the next 8 years? The median U.S. household would get a $4,000 real income raise.”
Talking to those in attendance, Trump praised the trucking industry and noted some of the benefits his plan would have for it.
“We want lower taxes, bigger paychecks, and more jobs for American truckers and for American workers. It’s happening,” he told the crowd. “Nothing gets done in America without the hardworking men and women of the trucking industry. Do we agree with that? Do we agree?
When your trucks are moving, America is growing. Do you agree?” he asked. “That is why my administration has taken historic steps to remove the barriers that have slowed you down. America first means putting American truckers first.”
Trump noted the number of regulations the administration has eliminated to date – by some estimates it is over 800 across the entire spectrum – and noted how he is trying to reduce the cost of energy, including fuel.
“We want low-cost fuel for our truckers and for our families all across this country,” he said. “And we are just getting started, believe me – just getting started.”
Trump touched on his $1 trillion infrastructure plan, which to date has not gained any traction in Congess, and the country’s low unemployment rate.
“Wages are rising – and you know you haven’t heard that in a long time,” he noted. “The stock market is soaring to record levels, boosting pensions and retirement accounts for hardworking Americans. Their values are going up every single day.”
Trump’s plan calls for the doubling of the standard deduction to $12,000 for an individual filer and $24,000 for a married couple filing jointly, a reduction of the number of tax brackets from seven to four – 0%, 12%, 25% and 35%. “Under our framework, we make the zero bracket bigger and get rid of the 10% bracket, and we’re reducing the 15% rate down to 12%. So that’s a massive amount of money,” he said.
“We need a tax system that is fair to working families and that encourages companies to stay in America, grow in America, spend in America, and hire in America,” Trump said.
Trump has also proposed eliminating the estate tax, and dropping the corporate tax rate from 35% to 20%.
“Because when American truckers – and I mean these great, great people, these are great heroes,” Trump said. “If they have a level playing field, there’s nobody on Earth with trucks or any other way that can beat you folks. There’s nobody. I know what you go through. There is nobody that can beat you. Nobody.”
Trump noted that companies that file as S corporations or partnerships will see a tax rate capped at 25%.
“The more than 30 million Americans who have small businesses will see – listen to this –a 40% cut in their marginal tax rate – 40%,” he said. “I wouldn’t want to be a politician against that. They’re going to have a long, hard winter.
“This will be the lowest top marginal income tax rate for small and mid-sized businesses in more than 80 years,” Trump added. “Not since 1931 have they had taxes anywhere near that level, right?”
Trump also noted the administration would like to see a tax write-off for equipment investment, allowing companies to write off 100% of the cost of the equipment in the first year.
“We want our companies to invest and expand, because that means more jobs, more products rolling off the assembly line, and more truckers delivering those products to stores all across our country,” he said.