President Trump called his tax-reform plan “rocket fuel for our economy” Friday as he promoted the proposal to U.S. manufacturers and predicted it will lead to a rebirth of American industry.
“Under my administration, the era of economic surrender is over — and the rebirth of American industry has begun,” Mr. Trump told several hundred people at a board meeting of the National Association of Manufacturers in Washington.
Employers are expressing optimism about provisions such as immediate and full expensing of business investments, a reduction of the corporate tax rate from 35 percent to 20 percent, and a new “pass-through” business tax rate of 25 percent. Such pass-through profits are now taxed as high as 39.6 percent.
“For the majority of American manufacturers that file taxes as sole-proprietors, S corporations or partnerships, we will cap your top tax rate at a maximum of 25 percent,” Mr. Trump said. “This will be the lowest top marginal income tax rate for small and medium-sized businesses in more than 80 years — this huge tax cut will be rocket fuel for our economy.”
The president, whose tax-reform plan was unveiled earlier this week, said the proposal will enable employers to hire more workers and increase wages.
“We want every American to know the dignity of work, the pride of a paycheck, and the satisfaction of a job well done,” Mr. Trump said.
The president said the provision for full expensing, which would be retroactive to this week, will “further help our companies to compete.”
“For the next five years, our framework will allow you to fully write off the cost of new equipment in the year you buy it,” he said. “That means more production, more investment, and more jobs.”
The president said the economy is already picking up steam under his leadership, noting that GDP hit 3.1 percent growth in the second quarter, “way ahead of schedule.”
“The S&P hit a record high just this morning as I was coming over,” he said of the stock market. “America is finally back on the right track.”
But he said the economy won’t reach its full potential until Washington fixes an outdated, complex and burdensome tax code.
“We need a tax system that encourages companies to stay in America, grow in America and hire in America,” Mr. Trump said.
Mr. Trump said that since the last tax reform was approved in 1986, other countries have “copied our playbook,” and the U.S. has fallen far behind with a corporate tax rate that is again among the highest in the world.
“It’s a massive tax on every product made in America,” he said. “It’s time to go from dead last to pretty much the front of the pack. We won’t be the lowest, but we’ll be getting pretty close.”
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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