WASHINGTON—The tax reform proposal from the House Republican leadership is getting mixed reviews from tire industry and other business interests, with many groups offering both praise and condemnation depending on the specific provision.
Introduced Nov. 2, H.R. 1—the Tax Cuts and Jobs Act—includes many provisions designed to help business and industry, including:
- A cut in the corporate tax rate from 35 to 20 percent;
- Allowing corporations to repatriate money kept overseas at a tax rate of 12 percent;
- Eliminating taxes on overseas profits; and
- A phaseout of the estate tax—the "death tax" hated by small businesses—with total repeal by Jan. 1, 2024.
The legislation would reduce the number of individual income tax rates from seven to four, at 12, 25, 35 and 39.6 percent. It would increase the standard deduction and the child tax credit, but eliminate deductions for state and local sales taxes, student loans and large medical expenses.
The deduction for state and local property taxes would be capped at $10,000, and the cap on the mortgage interest deduction for new home purchases would be halved, from $1 million to $500,000.
One of the most enthusiastic responses to H.R. 1 was from the American Trucking Associations, which wrote Congress Nov. 3, urging swift passage of the legislation.
"ATA recently hosted President Trump in Harrisburg, Pa., and strongly endorsed the tax reform framework that his administration worked to define with Congress," the association said. "We are pleased to see this framework now embodied in the Tax Cuts and Jobs Act, to the benefit of workers, small businesses and families across the economic spectrum."
The National Association of Manufacturers also said it was pleased with H.R. 1, which it called "a grand slam" for the U.S. economy.
"These tax cuts will make a real and positive difference for middle-class Americans, creating more wealth for higher wages, to reduce the cost of living and to increase savings for retirement and the future," Jay Timmons, NAM President and CEO, said in a Nov. 2 statement.
Not surprisingly, the United Steelworkers union—along with its parent organization, the AFL-CIO—took the opposite view.
“This bill is a job killer,” the AFL-CIO said in a statement. “The GOP tax bill would give companies a huge tax break for outsourcing.”
A $1.5 trillion cut in Medicaid and Medicare would only partially pay for the tax cuts proposed in H.R. 1, the union said.
“But the GOP tax bill still won't be paid for, so we can expect Republicans to demand more budget cuts that hurt working people in the future,” it said.
The National Federation of Independent Business said it could not support the tax reform package in its current form.
The NFIB's specific concern was the bill's provisions for "pass-through" businesses—businesses that are taxed through individual owners rather than at the corporate level.