Congress: Keep what’s working for the economy

By [ Courtney Titus Brooks ]

As Congress works toward extending the Tax Cuts and Jobs Act (TCJA), it's worth taking a step back and asking: Why mess with what’s working?

As President Trump said during his first term TCJA was a “once-in-a-generation opportunity”. At its core was the corporate tax rate reduction — from 35% to 21% — which vaulted America from the back of the pack to the front in the competition for global investment, and it brought dollars home that were being spent abroad. It was an immediate game changer that put America’s economy ahead of its rivals, fueling a wave of business investment in innovation and workforce development. Retailers invested in their communities by building new stores and distribution centers, and boosted pay for tens of millions of workers in every state across the country.

Corporate tax receipts are at a record high. That’s because companies poured their tax savings back into communities by creating more jobs and expanding employee benefits. As retailers directly employ millions of Americans, these investments are felt across the country.

Continuing TCJA’s pro-growth policies is vital to keeping the economic momentum going — adding new tax increases, especially limiting or eliminating the business SALT deduction, will slow us down at a fragile moment and insert unneeded and unnecessary uncertainty into the economy.

Today, some lawmakers are floating the idea of altering the long-standing deduction businesses have counted on to make investments in our communities. It may sound obscure and nothing more than a small tweak, but it’s actually a big deal—especially for RILA members. Capping the business SALT deduction is a backdoor corporate rate increase and will reduce the ability of retailers to invest in their workers, grow their operations, or give back to their communities. The President’s goals of driving investment to domestic businesses and workers would be severely undermined by a change in policy that would make it harder for business to grow production.

Capping SALT effectively doubles taxes on the money retailers are paying into communities, funds that are being used to build roads and schools, to maintain playgrounds and stock libraries.

As President Trump said after TCJA was signed into law, “Everyone said that was impossible. I got it done, and we had the best boom we’ve ever had.” Rolling back parts of it, by enacting a backdoor corporate rate increase through limiting or eliminating the business SALT deduction, would undo what the president and GOP led Congress achieved in 2017. Let’s stick with what’s working, protect growth, innovation and investment by leaving corporate taxes alone, and keeping America’s economy the envy of the world.