A fiscal year 2018 budget resolution approved by the House on Thursday lays the foundation for balancing the federal budget within 10 years, strengthening the military and advancing the nation’s first comprehensive tax reform in more than 30 years.
U.S. Rep. Diane Black (R-TN), the chairman of the House Budget Committee, took the lead on drafting the Building a Better America budget plan that cuts spending and grows the economy.
The measure passed in a 219-206 vote with support from U.S. Reps. Pat Tiberi (R-OH) and Steve Womack (R-AR).
The resolution requires 11 authorizing committees to find $203 billion in savings over a 10-year budget window to lay the groundwork for tax reform. Revamping the nation’s tax code to simplify it, lower rates and incentivize employers to hire workers would lift the U.S. economy, lawmakers say.
“Our budget also promotes tax and regulatory reform to get the federal government out of the way and allow our free-market economy to thrive,” Black said during her opening floor statement on the budget. “The larger the government, the less freedom individuals and businesses have to thrive, grow, hire and innovate.”
She said under the Obama administration, more than 14 million people left the labor force in the last eight years. “Through reconciliation, our budget specifically paves the way for pro-growth tax reform that will reduce taxes for middle class Americans and free up American businesses to grow and hire,” Black said.
The budget plan also outlines investments in health programs for seniors and vulnerable populations, as well as $621.5 billion in military investments and $75 billion to fight global terrorism.
“Building a better America requires a government that spends within its means, a military with the resources to complete the mission, an economy that creates opportunity for all and a federal bureaucracy that respects the taxpayers,” Black said.
Womack, a member of the Budget Committee, called the budget resolution a responsible plan geared toward helping families and small businesses.
“We must begin to move in a direction of financial fortitude and stay committed to giving our future generations a country that is sustainable and thriving, full of endless opportunities,” Womack said. “Building a Better America unlocks pro-growth tax reform by allowing the House to move forward with our plan to make a simplified tax code.”
Tiberi, the chairman of the Joint Economic Committee, highlighted the importance of tax reform that promotes entrepreneurship and economic growth during a hearing held on Tuesday.
“Tax reform is a key tool in our policy arsenal that could remove artificial barriers to starting a business and foster an environment where entrepreneurship can thrive,” Tiberi said. “Truth be told, entrepreneurs probably don’t think much about taxes when they launch a startup, and they shouldn’t have to. But before long they are hit with mind-numbing complexity that drains precious resources from the business.”
Startups that achieve success and become corporate taxpayers, Tiberi added, face one of the highest tax rates in the developed world and startups that pay individual taxes as pass-through businesses face even higher individual rates.
“The tax code also punishes success by forcing family business owners to do costly estate planning so the death tax doesn’t steal their ability to pass the business to the next generation of entrepreneurs,” Tiberi said. “In this increasingly global economy, entrepreneurs can start or move a business anywhere in the world. Yet our tax system is out of step with our competitors.”