On Friday, September 29, President Trump outlined his tax reform package in a speech to the National Association of Manufacturers (NAM) in Washington, D.C.
He began by reviewing Puerto Rico’s devastation by “storms of historic and catastrophic severity,” and the “massive federal mobilization” underway “to assist Puerto Rico, including the presence of over 10,000 federal personnel, including 5,000 U.S. military and National Guard personnel, led by a very, very strong and talented three-star general.” The island’s infrastructure, economy, and housing stock have been “wiped out,” the territorial and local governments are overwhelmed, U.S. personnel have begun rebuilding Puerto Rico’s infrastructure “from scratch,” and the Trump administration “will not rest . . . until the people of Puerto Rico are safe.”
Unlike President Obama, who might have launched into a harangue about climate change, Mr. Trump did not engage in unseemly sermonizing. However, later in the speech, when discussing trade policy, he made a point of great relevance to the climate debate: “We cannot have national security without economic security.”
The military and humanitarian capabilities America is contributing to the Puerto Rican relief and reconstruction effort are chiefly fossil-fueled. Moreover, only wealthy societies have the resources to mount such rescue and rebuilding programs, and America’s economic strength critically depends on access to affordable and reliable energy.
Most of Trump’s speech focused on his plan to replace the current “offshoring [tax code] model,” which drives U.S. companies, capital, and jobs overseas by making it too costly for U.S. businesses to compete, with an “American model” of dramatically lower tax burdens, which will bring companies, investment, and jobs back into the U.S.
Trump’s proposals include:
- Reducing the top corporate tax rate from 35 percent to 20 percent, which is not the world’s lowest rate but “below our average competition, by far”
- Capping small business tax rates at 25 percent, “the lowest top marginal income tax rate for small- and medium-sized businesses in more than 80 years”
- Abolishing the “death tax” so families no longer have to sell their businesses at fire sale prices “just to pay a very, very high and unfair tax”
- Allowing U.S. firms over the next five years to “fully write off the cost of new equipment in the year you buy it,” which will accelerate productivity-enhancing investments
- Eliminating the onerous tax penalty on repatriating corporate profits—estimated at $3 trillion—currently parked overseas
- “Doubling the amount of household income that is taxed at zero dollars.”
Trump also underscored the connection between those tax reforms and his pro-growth energy agenda. Both are “guided by the same economic goal: to keep jobs in America, to bring jobs to America, to create real prosperity for America, the country that we love.”
That is why we have lifted the restrictions on American energy, ending the war on coal, approving the Keystone XL and the Dakota Access pipelines. And I’ll tell you something: I did that immediately—first couple of days; 48,000 jobs and everybody is happy—and reversing the EPA intrusion into your business and into your lives. Instead, we are returning the EPA to its core mission: clean air and crystal clean water. That’s what we want. We want clean air. We want clean water.