President Donald Trump said today that he is doubling down on his promise to bring about tax reform. "We're going to simplify very greatly the tax code. It's too complicated. H&R Block probably won't be too happy. That's one business that might not be happy with what we're doing," Trump said. "Other than H&R Block, I think people are going to love it."
He said this today in a meeting with the CEOs of major retailers who met him at the White House where they expressed concerns over a border tax. Trump gave reassurances that the administration will soon announce an outline for tax reform that will affect individual taxpayers and businesses. "We're doing a massive tax plan. It's going really well," he said. Trump said that a tax plan can be expected very soon and will be "massive" and will "lower the rates very, very substantially for virtually everybody in every category."
Not mentioned was the plan being pushed by House Speaker Paul Ryan (R-WI) and congressional Republicans that would adjust taxes at the border, a provision that would effectively tax imports and hike costs for retailers such as Walmart and Home Depot. Senate Republicans are leery of the proposal.
Trump has mentioned H&R Block in the past in connection with tax reform. The tax preparation company is on record that it supports the simplification of the federal tax code. H&R Block CEO Bill Cobb told CNN recently, "The president is right. We should reform the tax code" He added, "There are ways we can streamline the tax code." However, Cobb said, "There are so many nuances to the tax code...I think there are ways you have to step your way towards more simplification." Cobb said finally, "But I think we can make it simpler, both for us as tax preparers and for you as an individual."
Back in 2015, according to Forbes, Trump said of H&R Block, “I want to put ’em out of business. A person with a simple tax return can’t figure it out. They have (to) go out and pay a lot of money to these companies that go out and do your tax return for you.”
Among the issues that can be addressed are the five definitions of a "child," among other simplifications in the 74,000+ pages in the federal tax code.
Following the meeting, the Retail Industry Leaders Association released a statement saying that it was a "positive and productive conversation."
House Republicans have proposed taxing imports as part of a plan to cut corporate taxes. Under the plan, businesses would no longer be allowed to deduct the cost of imported goods and services, but would no longer pay any taxes on revenues from exports. In today's system, U.S. companies are taxed on all profits, whether they are earned domestically or outside of the country. House Republicans assert that the plan, if passed, would encourage manufacturing in the US and job growth.
Americans for Fair Taxation, an advocacy group for tax reform, contends that its proposal for a "fair tax" would spur manufacturing and virtually eliminate the Internal Revenue Service. The organization has expressed approval of a fair tax bill introduced by Rep. Bob Goodall that also enjoys support from Vice President Mike Pence. Among the provisions of the bill are:
"This bill is a tax reform proposal that imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income and corporate income tax, employment and self-employment taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2017, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property, for property or services purchased for business, export, or investment purposes, and for state government functions."Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.
The Fair Tax system, said Steven L. Hayes of Americans for Fair Taxation, would spur manufacturing and employment while also reducing the country's trade deficit. “What we’re talking about is a better way to raise money," said Hayes. "We’re talking about a method that will grow the economy a lot faster, which will bring jobs back home, it will quit favoring imports over U.S. goods -- which is what the U.S. income tax system does..."