Taxpayer Watchdog Outlines Priorities for New Tax Plan

For Immediate Release

Contact: Kara Zupkus (224) 456-0257

WASHINGTON, D.C. – As Speaker of the House Mike Johnson (R-La.) looks to release his plan for reconciliation and tax reform, the Taxpayers Protection Alliance (TPA) emphasizes the need to permanently extend the Tax Cuts and Jobs Act of 2017 (TCJA) and focus on provisions that benefit American workers and businesses.

In anticipation of the proposal, TPA President David Williams offered the following comment:

“TPA urges Congress to permanently extend the Tax Cuts and Jobs Act of 2017 (TCJA) to keep marginal tax rates low for individuals and promote business growth. The TCJA was extremely beneficial to both American workers and business owners. By limiting itemized deductions, expanding the standard deduction, and putting a cap on state and local tax deductions, the TCJA simplified the tax code for the nation. Permanently extending the TCJA is essential to supporting continued economic growth and American business investment.”

“Additionally, TPA urges Congress to avoid including provisions that would eliminate taxes on tips, overtime pay, and Social Security payments. Eliminating the tax on tips is a gimmick that will only benefit 5.1 percent of workers.  A teacher making $60,000 a year shouldn’t have a higher tax bill than a server making $60,000 in tips. Such a provision would cut against the simplicity that so embodied the TCJA.

“Eliminating the tax on overtime could disrupt the labor market by encouraging workers to seek jobs that offer overtime pay, while increasing labor costs for employers. These tax cuts have the potential to alter employee benefit structures. Removing the tax on Social Security payments could have a significant impact on the deficit and create distortions in the tax code.

“Congress should also avoid reclassifying profits made by investment managers as individual income, rather than capital gains. Losing this incentive stands to negatively affect economic growth, consumers, and taxpayers. Similarly to the TCJA, the tax code should reward investing in the American economy and its upstart small businesses. There are myriad other ways for Congress to generate revenue without hurting investment in this way.

“Simplifying the tax code and ending wasteful spending should be the key goals for this upcoming reconciliation package. TPA urges Speaker Johnson and congressional leadership to focus on permanently extending the TCJA, lowering corporate and individual rates, and avoiding complex, costly deductions.”

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Taxpayers Protection Alliance (TPA) is a non-profit, non-partisan organization dedicated to educating the public through the research, analysis and dissemination of information on the government’s effects on the economy.