House Republicans tackled tax reform on Friday with the unveiling of the sixth plank of House Speaker Paul Ryan’s (R-WI) “A Better Way” policy agenda.
The roadmap for tax reform is based on three guiding principles – simplicity and fairness, jobs and growth, and an IRS that puts taxpayers first.
The sixth plank of the “A Better Way” policy agenda is based on recommendations from the Task Force on Tax Reform, which was headed by U.S. Rep. Kevin Brady (R-TX), the chairman of the House Ways and Means Committee.
“To start, the House GOP plan brings long-awaited relief to workers and families from the recurring nightmare of tax season,” Brady wrote in an op-ed published in the Wall Street Journal. “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. 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.”
Also under the plan, Brady added, small business would not be taxed under the individual side of the tax code. Rather, a distinction would be made between wages and business income, allowing for a lower small business tax rate of 25 percent.
The corporate tax rate would also be cut from 35 percent to a flat 20 percent by “eliminating dozens of crony tax carve-outs that hinder the nation’s economic potential,” Brady said.
U.S. Rep. Pat Tiberi (R-OH) added that the tax reform blueprint would mark the beginning of the conversation about pro-growth, comprehensive tax reform.
“This blueprint focuses on three key principles,” Tiberi said. “First, the tax code needs to encourage job creation and empower our employers to grow and succeed. Second, it should be simple and fair so that everyone can easily file their taxes. And third, the IRS needs to serve the American people—not the other way around.”
U.S. Rep. Peter Roskam (R-IL) said that the plan would simplify the tax code for working families and provide certainty and job security to the country’s workforce.
“Our current tax code is a mess and it puts American workers at a competitive disadvantage,” Roskam, the chairman of the House Ways and Means Subcommittee on Oversight, said. “The IRS is out of control and needs to reined in and broken up. Everybody knows we need something new and now House Republicans have put forward a bold plan — a better way. I’m grateful to Speaker Ryan and Chairman Brady for their leadership as we show the American people there’s a better way forward.”
Ryan added that the U.S. needs a tax code that works for taxpayers — not tax collectors.
“We want to make it simpler, flatter, fairer,” Ryan said. “Bring the number of tax brackets down from seven to three. Lower rates for everybody. Bring the top rate down to 33 percent. Close those special-interest loopholes. Consolidate those deductions and credits. Make it so simple that the average American can do their taxes on a postcard, and that the average IRS agent can understand it.”