Three main goals of the new U.S. tax law

When it comes to U.S. tax issues, it may be the biggest headache for many Americans, especially new immigrants to the United States. However, this long-standing problem may be solved soon.

Recently, after nominating the Secretary of the Treasury and the Secretary of Commerce, President-elect Trump put the U.S. tax reform and economic reform plans on the agenda earlier. Democratic and party members of the U.S. Congress have also begun taking action to propose the direction and basic framework for future tax law reform.

Last Thursday (December 1), the Heritage Foundation held a seminar on the U.S. tax law reform plan. Brady, Chairman of the Ways and Means Committee of the U.S. House of Representatives, raised his and the committee’s views on the U.S. tax law reform. Assumptions, directions and specific practices. The House Ways and Means Committee is one of the 20 special committees in the House of Representatives of the United States. It is responsible for taxation, trade and other matters. It is considered to be one of the most powerful committees in the House of Representatives.

Brady pointed out that the past tax laws in the United States have hindered the economic life of Americans. The future tax laws will focus on enhancing people’s economic capabilities, and the new tax laws will be based on helping to grow wealth and will be expected to Americans repeal the estate tax permanently.

The new tax law has three main goals:

First, to increase Americans’ wages, employment and promote economic development;

Second, to improve the United States’ International competitiveness, reversing the status quo of backwardness and reshaping its leading position;

Third, make the United States the most attractive place in the world for investment, employment and corporate headquarters.

The tax reform plan proposed by the House of Representatives Ways and Means Committee will mainly focus on three aspects:

1. Substantial tax reform for enterprises Tax cuts will improve the competitiveness of U.S. companies

A. Establish the lowest tax rate for companies in modern history

The new tax law will reduce taxes for "all" U.S. companies for the first time in history. All enterprises, big or small, can receive tax cuts, thereby benefiting all enterprises and providing them with opportunities for development. At the same time, it can also drive the relocation of American companies, R&D and production departments.

B. Permanent abolition of the estate tax

The estate tax is the main obstacle that makes it difficult for Americans and businesses to leave their assets to their children. This has caused huge damage to the U.S. economy. The new tax law is expected to permanently eliminate the estate tax.

Brady predicts that after the implementation of personal and corporate tax reform, the U.S. economy is expected to grow by 9%, Americans’ after-tax income is expected to increase by 8%, the United States will gain millions of new jobs, and the U.S. The competitiveness of enterprises will be greatly improved.

2. Streamline the tax law, make it fair and reasonable

A. Complete tax filing with one postcard

The current U.S. tax law is extremely complex, and few people can understand it all. In this regard, the new tax law will be extremely streamlined based on the principles of fairness and reasonableness, allowing 95% of Americans to file their own taxes by postcard without having to resort to others or tax reporting companies.

B. The types of tax rates will be reduced to 3 types

The new tax law will reduce the types of tax rates from the current 7 types to 3 types. The purpose is to encourage employment and improve work efficiency. , increase family income and help Americans realize their ideals. In addition to increasing the tax exemption limit, the tax rate for deposits, investments and work income will also be reduced by half, thereby promoting economic and business development.

C. Increase the tax exemption for charitable donations

The third way to simplify tax rates is to increase the tax exemption for charitable donations, thereby encouraging people to donate, care for and repay the community. At the same time, increase the tax exemption for families with children, so that these families can afford their children's college expenses.

3. Rebuild the IRS to provide efficiency-focused services

The current Internal Revenue Service (IRS) has a large organization and high expenses, which is a drag on the economy.

The new tax law will redesign the structure of the IRS to make it more streamlined and efficient, able to answer questions about tax laws and tax returns from companies and individuals more quickly and accurately, and improve the service level of the IRS for companies and individuals.

In addition, the IRS will establish a team that can quickly handle tax disputes. Simplify people's appeal procedures and fees for tax disputes, allowing the IRS to handle tax dispute cases faster. Tax law reform is not an easy task, and the U.S. Congress has already begun to work hard to promote this work, which may have given Americans good prospects for tax cuts.

The outside world generally believes that Trump’s series of drastic improvement plans for the domestic tax environment are indeed significantly beneficial to the U.S. domestic economic environment, especially persistent issues such as employment and national per capita income. However, the large-scale flow of US dollars in the international market will bring considerable monetary and financial pressure to many small and medium-sized countries.

Reasonable currency allocation and taking advantage of tax cuts to invest in U.S. dollar assets are one of the ways to deal with the current situation of a strong U.S. dollar.