Our federal tax system needs a fundamental overhaul to ensure that it works for families and businesses, and supports long-term economic growth. I have long advocated that reform of the tax code should be built around a few relatively simple principles.
First, any changes in the code must protect poor families and the middle class. I fully support the goal of broadening the tax base and lowering rates, but it should go without saying that this process cannot result in an increase in the tax burden for lower and middle-income Americans.
Second, tax reform must raise revenue. Our budget deficit is simply too large to be closed through spending cuts alone. Republicans and Democrats, liberals and conservatives, have acknowledged the fact that without revenue as a percentage of Gross Domestic Product eclipsing the 20% mark, we can never fairly balance our budget.
Third, tax reform should simplify the code, and tax incentives that no longer serve our economic interests should be the first to go. For instance, high oil prices mean that tax breaks for production are totally unnecessary and counterproductive. Similarly, the large gap between rates on capital gains and ordinary income can no longer be justified when capital gains rates are applied equally for investment in both domestic and foreign markets.
Unfortunately, the Republican tax plan that was signed into law by the president meets none of these principles - it raises the deficit by $1.4 trillion over the next ten years, it leaves our tax code riddled with loopholes, and it is loaded with giveaways for billionaires and wealthy corporations. Meager tax breaks for middle and low-income families expire after just three years, while the giant cuts for the wealthiest Americans remain. The law also specifically hurts families in Connecticut by eliminating or capping popular deductions on state and local taxes and mortgage interest payments. Ultimately the law is a bad deal for our state.
I truly believe our tax code should be simplified and restructured in a way that gets rid of unfair loopholes and levels the playing field for workers and small businesses. Despite this setback, I will keep working toward that goal.