President Donald Trump introduced his United States tax reform proposal to a collection of representative members of the trucking industry earlier this week at an event arranged by the American Trucking Associations. Among the audience was a mixture of truck drivers and fleet managers, both of which were eager to hear how a tax reform would affect the trucking industry. President Trump claims his tax reform is poised to concurrently simplify the country’s tax structure while ensuring the restructured plan will maximize the amount of money in the pocket’s of taxpaying truckers.
Significant modifications within the tax reform proposed by Trump suggest the support of Congress and execution by the federal government is vital in order to witness substantial benefits for those in the trucking industry. Listed are a few of the notable propositioned amendments to the country’s tax blueprint:
-Reducing the quantity of tax brackets from eight to four – zero percent, 12 percent, 25 percent and 35 percent.
-Removal of estate tax assessed on the deceased
-Allowance of companies to “write off 100 percent of the cost of new equipment the year you buy it.”
-Contract corporate tax rates from 35 percent to 20 percent.
The sound of familiarity rings, as Trump’s proposed corporate tax reduction is reminiscent of a subset of Ronald Reagan’s economic policy to cut corporate taxes rates with the implementation of ‘Reaganomics,’ also known as ‘voodoo economics,’ a synonymous term coined by George H. Bush prior to his term as Reagan’s vice president. Within the components of Reaganomics lies the notorious trickle-down theory, which suggests decreasing the costs of taxes to corporations will generate savings that will ‘trickle down’ to the rest of the economy, prompting economic growth.
In theory, these savings will aid in the purchasing of new equipment and the funding necessary for new employee training, which in turn leads to “more freight to be delivered and more contracts to sign,” an ideal scenario for the trucking industry. However, it remains to be seen how effective the policies will be in conjunction with Trump’s proposed plan of a colossal funding package to refurbish the country’s infrastructure, a costly endeavor that has an uncertain consequence on the future economy.