There’s no better time to make the case for tax reform than the first couple of weeks in April. Tax Day - normally on April 15, but because of holidays’ it will be April 18 this year - looms large in our collective consciousness at this time of year.
There’s already a blueprint in place, in Congressman Kevin Brady’s “Better Way for Tax Reform.” It makes the case that a simpler, less burdensome tax code would have an enormous impact on our economy.
“America’s tax code is beyond repair,” Brady wrote in the Wall Street Journal last summer. “Tinkering with it won’t work. The only hope is a bold tax-reform plan that will liberate our nation from the slow-growth status quo and jump-start a new era of American prosperity and growth. The House GOP has been building on years of work by Ways and Means Committee Republicans to develop pro-growth tax reform. On Friday, as part of Speaker Paul Ryan’s ‘Better Way’ agenda, House Republicans are delivering to the American people a plan for a 21st-century tax system. It delivers simplicity and fairness, yet is built primarily for growth in jobs, paychecks and America’s economy.”
The plan starts with lowering tax rates for middle class families.
“By lowering rates, increasing the standard deduction, streamlining seven tax brackets into three and eliminating a host of special-interest provisions, our blueprint simplifies the tax code dramatically for families and individuals,” Brady writes. “And by providing incentives for savings and investment, it fosters economic growth and job creation while ensuring that Americans spend far less time and money filing their taxes.”
Brady’s plan would also reform corporate taxes. The business tax code would be simplified, and the corporate tax rate of 35 percent would be lowered to 20 percent.
“This is the largest corporate-rate reduction in U.S. history, and is achieved by eliminating dozens of crony tax carve-outs that hinder the nation’s economic potential and keep rates artificially high for everyone,” Brady explains. “The blueprint dramatically levels the playing field for America’s businesses by bringing the U.S. tax system more in line with those of our international competitors. In a change designed to strengthen our global competitiveness, American job creators will no longer be taxed both abroad and at home on the same dollar of income. There will be a zero tax rate on dividends brought home to America.”
Brady’s plan is workable, well-reasoned and has the backing of many of the nation’s leading economists.
But can President Trump get it done? There’s still some doubt.
“Who really knows why the ‘Trump bounce’ stalled out a bit in March,” writes Stephen Moore of the Heritage Foundation. “But one contributing factor is the increasing stock market nervousness about whether the GOP will deliver on tax reform. It’s one of the party’s central promises to voters and after the strike out on Obamacare repeal, investor confidence that the pols could deliver a tax cut was shaken for sure.”
But it’s an achievable goal. For the good of the American people, let’s reform the tax code.