WASHINGTON, DC – It didn’t take Congressman Kevin Brady (TX-8) long to get up and running as Chairman of the Ways & Means Committee. A little more than six months after taking the reins of the powerful committee, the veteran legislator unveiled a blueprint that would make the most sweeping reform of the U.S. tax system in 30 years.
Released as part of Speaker Paul Ryan’s ambitious agenda to provide the American people with “A Better Way” this election year, Brady’s reform blueprint would cut rates, simplify the tax system, and break up the Internal Revenue Service. The Texas Republican talked about the plan in remarks yesterday morning before a breakfast meeting of The Ripon Society, where he not only explained why reform is needed, but why a tax code that’s “built for growth” is long overdue.
“We don’t have to settle for this second rate economy,” Brady stated, “where paychecks are flat and millions of qualified people can’t find full time work. We don’t have to sit here and watch other countries pass us by. Yet that is exactly what’s happening. The problem, part of it, is our tax code. It is broken. It’s too costly, it’s too complex, and, mainly, it’s just unfair. And so what we have proposed is a tax code built for growth — built for the growth of family paychecks, built for the growth of local businesses, and built for the growth of the U.S. economy.”
“For the first time, we lower corporate tax rates and pass some tax rates to the lowest in modern history. We want businesses to keep more of what they earn so they can grow the local economy, not Washington’s economy. For the first time, we stop taxing American businesses here and abroad and we stop taxing them when they succeed and win and want to bring those profits home. The tax rate in the future for American companies competing and winning and wanting to bring those profits home to invest in our communities is zero. For the first time, we stop taxing our exports so that America can be competitive again. We want to remove every incentive for a company to move their headquarters, their manufacturing, their research and development – anything offshore.”
“For the first time in history, we are also going to allow businesses through the tax code unlimited immediate expensing of their business investments. We know from the last 50 years that if you track what creates main street job growth, the one thing that creates those jobs is business investment. When you’re investing in buildings, equipment, software, and technology – things that make you more productive and more competitive – it grows jobs in a big, big way. We think that business investments coursing through our local economies are going to be huge catalysts for job growth going forward.”
Brady has served in Congress for 19 years. He previously led two of the Ways & Means Committee’s key panels — Health and Trade – and also served as the top House Republican on the Joint Economic Committee. Before his election to Congress, he spent 18 years as a chamber of commerce executive, where he saw first-hand the tax code’s impact on both big business and small business, and how the system had gotten so unwieldly it often could not tell the two apart.
“We separate wage income from business income so that we lower tax rates,” Brady noted in describing another element of his reform blueprint. “A big challenge we’ve had in the past is that they were melded together. Trying to separate Bill Gates from Bill the Plumber was impossible, so Bill the Plumber paid higher tax rates. For the first time, we make that separation so that we can lower those rates as well.”
The Ways & Means Chairman also outlined how the plan would benefit American workers and their families. “We condense seven tax brackets down to three and we lower them at every step — 12 percent, 25 percent and 33 percent. People will pay fewer taxes, and less goes to Washington.” He added that the plan also includes education tax credits to help those young people who want to go to college, and those who want to learn a skill or trade. The plan would also simplify the filing process and allow most Americans to file their taxes on a simple postcard instead of a complicated form.
“If you’re going to have a fair, simpler tax code, then we need a fair, simpler tax collector.”
In addition to reducing tax rates and simplifying the tax system, Brady stated that the reform blueprint would also promote greater accountability by breaking up the IRS.
“If you’re going to have a fair, simpler tax code,” he declared, “then we need a fair, simpler tax collector. So we are proposing to bust up the IRS as it is. Redesign it into three smaller focused units, and make some other reforms as well. Our thinking currently is to have a business unit staff with the most qualified business experts on the IRS side of the deal to answer your questions on international tax, domestic tax, and all that. Second, we’ll have a family unit really focused on state-of-the-art customer service. How many of you have ever tried to get a timely, accurate answer from the IRS? It’s tough to get, and it’s not too much to ask. Finally, we are proposing a third, smaller unit that’s independent of Treasury. Sort of a small claims court to help people be able to resolve questions affordably and timely.”
The bottom line, Brady said, is that the system is unfair, outdated and needs to be changed. “We’re thinking anew about this,” he concluded. “We’re all in for growth for jobs. We’re all in for simplicity for families and individuals. And we’re all in for accountability. That’s the tax reform blueprint our team has put together.”
To view the remarks of Chairman Brady before The Ripon Society yesterday morning, please click on the link below:
The Ripon Society is a public policy organization that was founded in 1962 and takes its name from the town where the Republican Party was born in 1854 – Ripon, Wisconsin. One of the main goals of The Ripon Society is to promote the ideas and principles that have made America great and contributed to the GOP’s success. These ideas include keeping our nation secure, keeping taxes low and having a federal government that is smaller, smarter and more accountable to the people.