U.S. Rep. Rodney Davis, R-Ill., is embarking on a tour to talk federal tax reform, and he’s getting an earful from constituents.
One of the participants in the roundtable discussion in Springfield Aug. 1, Merrill Lynch financial adviser Gary Seitz, told Davis to be bold, throw out the current tax code, and start from scratch.
“I’m a believer that as the government grows, the economy slows,” Seitz said. “Take less money from the individual so they can use it for themselves to buy houses, buy cars, invest, buy a pizza.”
Seitz said the economy works best when people spend or save their money as they see fit.
Davis, who hails from Taylorville, is pushing for tax reforms that will help middle-income families, who, Davis said, are too often forgotten by Washington. Materials from Davis’ office explain that the plan is to simplify the tax code so that 9 out of 10 Americans will be able to file their taxes on a simple post card. Davis also wants to lower rates for Americans across the board, preserve important middle-income deductions to help Americans buy homes, pay for college, or donate to charity, and allow more savings by cutting in half the tax rates on personal savings and investment.
Davis said simplifying the tax code and reducing rates across the board would save taxpayers a lot of money.
“The average middle-class family in Illinois,” Davis said, “would get an extra $5,200 dollars in their pocket to be able to pay for a house, to be able to send their kids to college, and to be able to save up for a rainy day.”
Davis said getting federal tax relief will help alleviate part of the newfound burden Illinois residents have with an increased state income tax.
The state income tax went up 32 percent to 4.95 percent from 3.75 percent after Democrats and some Republicans overrode Gov. Bruce Rauner’s veto of the tax hike.
The state corporate income tax also went up to 7 percent from 5.25 percent.
Illinois Chamber of Commerce President and CEO Todd Maisch said federal tax reform will also help Illinois’ small and midsized businesses.
“Illinois definitely needs to get its act together and have its own policy changes,” Maisch said, “but Illinois will definitely benefit if there is federal action.”
For businesses, Davis’ office said the tax reforms discussed so far would help create more than 70,000 jobs in Illinois by no longer taxing small-business income at an individual rate, which his office said can be as high as 44.6 percent. The plan would also end the federal estate tax, also known as the “death tax,” which would allow family farms and businesses to pass property down to future generations without a large tax bill.
Davis said it’s up to constituents to help cut through the partisan divide in D.C. “It’s going to be their responsibility to talk to all policymakers to find bipartisan solutions.”
Davis said it’s unfortunate the Senate didn’t act on health care reform, which he said goes hand-in-hand with tax reform.