President Donald Trump comes to Missouri Wednesday to talk about a subject every Kansas Citian cares about: taxes.
The president wants to reduce taxes, somehow, and make paying them simpler.
Those hoping for specifics in Trump’s speech in Springfield will probably be disappointed. He has shown little interest in policy details since his inauguration.
Nevertheless, Congress will take a serious look at tax reform this fall. We support that effort. The federal tax system is complicated and often unfair, and it needs an overhaul.
The president and lawmakers should keep these goals in mind as they approach tax reform:
▪ Beware the Kansas experiment.
In 2012, Kansas lawmakers believed monumental tax breaks for certain small businesses would help create thousands of jobs and boost the state’s economy.
They were wrong. Kansas has spent the last four years digging out of the hole created by the supply-side pipe dream.
Washington must avoid a similar mistake. Tax fairness, not a shot of adrenaline, should be the goal.
▪ Corporate taxes can come down slightly. We endorse the idea of corporate tax reform and a small rate cut. Business tax rates are unfairly high, leading to tax avoidance schemes or added costs for consumer goods and services.
But the reduction should be limited. Businesses should demonstrate efforts to hire more workers to qualify for additional tax reductions, a strategy Kansas failed to implement.
▪ Tax reform shouldn’t add to the federal deficit. The U.S. already owes nearly $20 trillion; cutting taxes and adding to that debt is wrong. And, as we learned in Kansas, cutting spending to match tax cuts is difficult and unpopular.
Yes, expand the child care credit but keep the estate tax. Dead people don’t pay it. Their heirs do.
Avoid adding sales taxes, excise taxes or excessive tariffs that increase costs at the grocery store.
▪ Individual rates can be reduced but should not be lowered for the wealthy. Reducing the tax burden for the middle class is an important goal. About 45 percent of all Americans don’t pay federal income taxes, but virtually everyone pays other levies: the payroll tax, as well as state and local taxes.
When you consider the total tax burden, middle class Americans could use some relief.
Cutting taxes for wealthier Americans, on the other hand, will just add to the deficit.
▪ Make rate reductions immediate and retroactive. There’s talk of making tax cuts retroactive. That would put additional funds in middle-class pockets.
The goal of tax policy never changes: Taxes should be fair, broad and low.
As the president arrives in Missouri to launch his push for tax reform, he should keep those objectives in mind.