SCHAUMBURG – Tax reform is on the way, and while the process may not be for faint of heart, the chance for reform is best since the Reagan years, Congressman Peter Roskam (IL-06) told a group of Chicago-area manufacturing execs Monday morning.
"This tax code is not working for us anymore," Roskam said. "If Donald Trump wants to flip the game board of American politics, I think he can flip the game board of the tax code and make the U.S. the most competitive tax code in the world."
Roskam's words were good news to the manufacturers in the room as Roskam – who was just appointed chairman of the Ways and Means Committee's Tax Policy Sub-Committee – explained in more detail what type of reform the company owners could anticipate during the upcoming year.
"In 1986, America had the lowest corporate tax rate, today we have the world's highest rate," Roskam said, so with a conservative Republican majority in the U.S. House, "I think tax reform is likely to take place in this climate."
Two major reforms the Republican House Caucus is proposing that would boost American manufacturing are being considered for swift movement, Roskam said – lowering the corporate tax to 20 percent and initiating a border adjustable tax.
"You pay the statutory income taxes on the products you make here, and when you export to another country, you pay their required taxes as well," Roskam said. "Our products sold overseas are double-taxed and their products that come our way are not taxed at all. We would adjust that at the border – that's the border adjustable tax."
For individuals, the proposed changes would shrink the number of rates from the current seven down to three, with a bigger standard deduction. Charitable contributions would not be limited and education savings, retirement savings and child tax credit savings would be encouraged.
"With this plan, 95% of individuals would not have to itemize," Roskam said. "Their returns would be postcard-size, compared to today's forms."
Roskam also told the company owners that he was optimistic about major changes in federal agency regulations and the health care insurance system.
Chicago area manufacturers like Atlas Tools' Zach Mottl were interested in hearing what the congressman had to say about what they could expect in tax reform, trade reform and skilled workforce development.
Mottl, who presides over Technology & Manufacturing Association's Government Relations Committee, said the TMA members and manufacturers are excited about the future and opening the way for more manufacturing jobs.
"These are some of the best jobs in the world. My family has been around for four generations and we've got almost 80 employees working for us. The average worker's tenure is twenty years for those employees. I know it's the same for most of those here," he said.
TMA President Steve Rauschenberger, who served in the Illinois Senate with Roskam, encouraged those attending the breakfast to engage in expressing their opinions to their federal lawmakers.
The association's political action committee has been focused on influencing state politics in the past two election cycles, and hosts annual events with area mayors.
