America is a place where hard work, success and achievement are rewarded, and your hard-earned tax dollars are supposed to be respected and spent wisely. Unfortunately, our economy has been stuck in neutral for far too long, causing stifled growth and shrinking opportunity. It’s clear that the current playbook of an ever-growing federal government and ever-climbing taxes isn’t working. The president has pursued these policies for almost five years, and the results are plain to see in stagnant job growth and the massive growth of the federal government. Instead, we must build a 21st century economy where America can compete globally and create jobs here at home. One way to do that is by reforming our outdated tax code to get complex provisions out of the way, to close unfair loopholes and get the economy moving again.
It’s been over 25 years since the last time our tax code was reformed, and since then, the code has been amended a staggering 15,000 times. It has become so complex and burdensome that Americans and businesses spent more than seven billion hours completing the paperwork and billions of dollars in compliance costs last year alone. The status quo is absolutely indefensible. We can do better.
As a member of the tax-writing Ways and Means Committee, I have participated in more than 20 hearings on simplifying our tax code since 2010. In this effort, we have elicited feedback from ordinary Americans, small business owners and worldwide American companies to promote openness and transparency. All this fact-finding has reinforced the urgent need to modernize our tax rules to create a fairer, more even-handed system that protects Americans and ends special breaks for Wall Street. By eliminating loopholes and reducing our corporate tax rate – which is the highest in the industrialized world – American companies will be more competitive selling their products and services on the global stage, and therefore able to expand here in the U.S. And by reducing the burden of the tax code on small businesses, we can strengthen Main Street businesses and improve the economy for everyone.
While President Obama has talked positively about tax reform, so far he has only indicated a willingness to reform the corporate tax structure to try to increase rates and raise more tax revenues for the government to spend. Reforming the corporate tax code to make American businesses more competitive is important, but so is reforming the personal income tax code to create a flatter, fairer system and let families and individuals keep more of their hard-earned money. The House’s current approach is similar to the successful tax reform plan of 1986 that followed what’s called a revenue-neutral plan. The savings from closing loopholes and carve outs for special interests is used to lower the rates for everyone and create a fairer, simpler system. With lower tax rates, companies have the ability to invest in their business, creating more jobs, paying higher wages and lifting the economy. In the end, the federal government enjoys increased revenues, but because businesses are growing, not because of increased rates. Independent economists echo the call for revenue-neutral comprehensive tax reform, saying that when coupled with reduced government spending, it could lead to one million new jobs in the first year alone. That’s a real data-driven strategy to jumpstart the economy, create jobs and spur growth.
In the coming weeks and months, members from both the House and Senate will work to produce a long-term budget agreement that addresses our unsustainable debt and deficits, and tax reform is a unique opportunity for common ground in these negotiations. In 2011, President Obama and House Republicans passed the Budget Control Act, which reduced spending for two consecutive years for the first time since the end of the Korean War. We have made significant progress in reducing spending, but one major area that also needs immediate attention is the growth that tax reform represents. All the elements are in place to do something for the long-term good of our country. Through bipartisan tax reform, a stronger economy for everyone is within reach.