We need a tax code built for growth

Families and businesses along Main Street continue to suffer through a disappointing economic recovery. The recovery’s jobs gap, income gap and growth gap remain unacceptably large — creating a growing opportunity gap for Americans trying to climb the ladder to success.
Too often Washington’s quick answer to “where are the jobs?” is to simply throw more money into failed programs: more unemployment extensions, more increases to the minimum wage and more stimulus spending.

Those are the same failed solutions that gave us this weak recovery. “Staying the course” is not an acceptable option. Let’s fix our broken code and rein in the IRS so our economy can grow, and we can not only balance the budget, but begin paying down America’s
$17 trillion debt.

America’s tax code is an incomprehensible mess that stifles job creation and economic growth. It’s too costly, complex and unfair. It’s unfair to families, to businesses and to our nation. Our businesses struggle to remain competitive worldwide, and our economy is dragged down by the $170 billion annual cost to comply with this outdated code.

{mosads}Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, recently released a draft of comprehensive tax reform legislation — the first top-to-bottom rewrite of the code since President Reagan and Treasury Secretary James Baker III in the 1980s.
Based on analysis by the independent, non-partisan Joint Committee on Taxation (JCT), the Tax Reform Act of 2014:

• Creates up to 1.8 million new private sector jobs.

• Allows roughly 95 percent of filers to get the lowest possible tax rate by simply claiming the standard deduction (no more need to itemize and track receipts).

• Strengthens the economy and increases Gross Domestic Product (GDP) by up to $3.4 trillion.

• Based on calculations using data provided by the JCT, the average middle-class family of four would have an extra $1,300 per year in its pocket from the combination of lower tax rates in the plan and higher wages due to a stronger economy. And this draft repeals the ever-encroaching Alternative Minimum tax.

Small businesses get a tax cut like larger businesses. Instead of the current code that shifts jobs, research and investment overseas, U.S. companies of all sizes will now be better able to compete overseas with a lower 25 percent corporate tax rate and a territorial system. No longer will they be penalized for bringing their hard-earned profits back to be invested in America.

Chairman Camp’s discussion draft is the result of three years of hard work by the Ways and Means Committee. It is the necessary next step for a thoughtful conversation on what a tax code “built for growth” should look like. It is specific and comprehensive. It doesn’t add a dime to the deficit, nor does it raise taxes to bail out Washington’s spending problems.

And because the draft is neither more nor less progressive than the current code, no one can claim it “raises taxes on the middle class to give tax breaks to the rich.” That tired refrain will now have all the credibility of, “if you like your healthcare plan you can keep it.”

This is a discussion draft. Unlike the Affordable Care Act that was assembled in secret, this is a unique invitation to the American people to help shape a 21st century tax code.

It is an opportunity for businesses and industry to weigh in as well, because in real-life tax reform, there are real-life trade-offs. For tax reform to succeed, every industry must contribute something to lower tax rates.

Study the draft. Look at the entire picture, weighing the benefits of a 30 percent corporate rate cut, a more competitive global tax approach and a stronger U.S. economy against specific provisions you may not like. Analyze it in total, and then bring back your ideas on how to build a better tax code. The committee is listening.

What we can’t afford to do is wait. Millions of Americans can’t find full time work. Millions more have simply given up. We are losing jobs to China, Europe and other countries with a smarter tax code and lower rates. Most Americans have also given up hope that Washington will ever fix this broken code and rein in the IRS.

Tax reform is incredibly difficult, but it’s doable. Chairman Camp’s draft is the right place to start a calm, thoughtful conversation on designing a 21st century tax code that’s built for growth — for our families, our businesses and our nation.

Brady has represented Texas’s 8th Congressional District since 1997. He is chairman of Congress’s Joint Economic Committee and sits on the Ways and Means Committee.