Americans are fed up with the broken U.S. tax code and the incredible burdens it imposes on families, local businesses, and our economy. The only real solution is bold, pro-growth tax reform that rejects the status quo and propels America into a new era of economic freedom and competitiveness.
In June, House Republicans delivered this plan as part of Speaker Paul Ryan’s “Better Way” agenda. Our Blueprint for bold, pro-growth tax reform represents the first consensus proposal to overhaul the tax code put forward by House Republicans in 30 years. Regardless of who is elected president in 2016, we intend to turn this Blueprint into fiscally responsible legislation and push it forward in the New Year.
First and foremost, our Blueprint is built to unleash growth – the growth of families’ paychecks, the growth of our nation’s small businesses, and the growth of the American economy as a whole.
According to an analysis performed by the Tax Foundation, our plan would boost America’s gross domestic product by more than 9 percent. That’s a gain to our economy of $2 trillion, or nearly $6,000 per person. In addition, the organization found that our Blueprint would significantly raise wages and promote the creation of nearly 2 million full-time jobs.
Our Blueprint is built to unleash growth – the growth of families’ paychecks, the growth of our nation’s small businesses, and the growth of the American economy as a whole.
This all starts by supporting the success of Main Street job creators and the millions of American workers they employ.
America’s small businesses will no longer be taxed under the individual side of the code at rates as high as 44.6 percent. Instead, they will be subject to a tax rate of no more than 25 percent. This will spur job growth in communities across the country by allowing local employers to keep more of what they earn and reinvest it in their companies, their workers, and their local economies.
Next, businesses of all sizes will be able to fully and immediately write off purchases of new equipment or technology needed to produce and compete at a higher level. This will boost productivity, output, and job creation in a major way by providing a zero tax rate on new business investment. With these savings, local businesses throughout the country will have more freedom to grow, hire new workers, and increase wages.
Our Blueprint also takes dramatic steps to level the playing field for U.S. companies by transforming America’s outdated international tax system into one of the most modern, pro-growth systems in the world.
We cut our nation’s 35 percent corporate tax rate – currently the highest in the industrialized world – to a flat 20 percent. We move the United States to a true “territorial” system, where multinational businesses are not taxed twice on the same dollar of income. And companies that currently have income trapped overseas will be able to bring this money home at very low tax rates so this money can be invested in our communities.
These bold measures in our Blueprint will remove incentives for businesses to relocate elsewhere and make America a magnet for investment – and reinvestment – in our local economies. The plan will make it easier for our businesses to compete and succeed anywhere in the world, but especially here at home.
In addition to the unprecedented pro-growth features of our Blueprint, we take historic actions to simplify the tax code for taxpayers, bringing long-awaited relief from the nightmare of tax filing season.
We eliminate dozens of special interest loopholes in order to deliver a fairer, flatter tax code with lower rates. Rather than the seven income tax brackets we have currently, there will only be three. And by increasing the standard deduction, our Blueprint will spare the vast majority of individuals and families the hassle of itemizing.
Our plan also improves and streamlines vital tax provisions that support families, charitable giving, and higher education. This will make it easier for Americans to save and invest in what is important to them. Additionally, by cutting tax rates on savings and investment, the Blueprint will incentivize these essential economic activities to further promote growth.
Ultimately, the House Republican Blueprint delivers a tax code so straightforward and fair that, come Tax Day, the vast majority of Americans will be able to file their taxes on a form as simple as a postcard.
The House Republican Blueprint delivers a tax code so straightforward and fair that, come Tax Day, the vast majority of Americans will be able to file their taxes on a form as simple as a postcard.
But our Blueprint does not stop here. We know that a simpler, fairer tax code demands a simpler, fairer tax administrator. So we bust up and redesign the Internal Revenue Service.
Instead of the unresponsive and unaccountable agency that exists now, the IRS would be centered around three units focused on delivering top quality customer service to taxpayers. The first would be dedicated to providing accurate and timely assistance to individuals and families when they have tax questions. The second unit will do the same for businesses large and small. The third unit will function as a small claims court separate from the IRS to help taxpayers resolve routine tax disputes quickly and effectively.
Finally, our plan imposes new checks on the power of the IRS Commissioner. We make clear that this person’s sole objective is to administer the tax code in an objective, non-political manner for the benefit of American taxpayers. Future IRS Commissioners will be limited to a term of just three years and may be reappointed by the President only once. This will ensure new, effective management perspectives and prevent entrenched bureaucrats from abusing their position, their authority, and the rights of taxpayers.
At the end of the day, this is not the House Republican tax code – it belongs to the American people. We will continue to lead on tax reform by listening and incorporating feedback from American families and job creators.
To bring lasting strength to our economy, we must have the same kind of leadership on bold, pro-growth tax reform from the next resident of 1600 Pennsylvania Avenue.
Kevin Brady represents the 8th District of Texas in the U.S. House of Representatives. He also serves as Chairman of the Ways & Means Committee.