Louisiana Senator pushes for tax reform to boost economy
WASHINGTON, D.C. (KSLA) - In a conversation Friday, Sen. John Kennedy said he "wants to keep tax reform simple and go big" with his two priority plan that he believes will help boost consumer spending, production, create jobs, and increase wages.
Kennedy acknowledged economic growth but said the U.S. economy is not growing fast enough.
Priority one of Sen. Kennedy's plan is tax relief for middle-class Americans. Kennedy said, "the cleanest way" is through the standard deduction on federal income taxes.
Kennedy noted about 70 percent of taxpayers take the standard deduction opposed to itemization.
Kennedy used a Louisiana working family of four with a median income of $60,000 per year as an example. He says at the current deduction, that family would pay approximately $3,500 in federal income taxes.
Under Kennedy's plan, he says that family would save $1,700 per year.
"The family could use that savings for retirement, college savings, a down payment on a car, or buy a boat," according to Kennedy.
Kennedy believes this will have a substantial economic stimulus impact.
Citing a 2014 Congressional Research Service report, Kennedy's office says if Congress were to make a simple change, like doubling the standard deduction across the board, it could potentially inject over $600 billion back into the economy over 10 years.
Sen. Kennedy's second priority is business tax relief.
Kennedy believes "part of the reason for slowed job growth is because some business people don't have access to capital, but instead spend on federal regulations," which Kennedy noted lawmakers are working on relaxing those regulations.
Kennedy also said, "those people who do have capital are not spending on new plants, equipment or software. As a result, no new jobs are created and productivity is not growing."
Kennedy says if business taxes are cut, it will not only create new jobs, but also increase wages for small and large companies.
Sen. Kennedy says he is hoping to convince his Senate colleagues to make his tax reform priorities theirs as well.
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