By Jim Renacci, ,
Published September 27, 2017
As we prepare to roll out our unified framework for tax reform this week, I decided to push my principles forward in hopes to start building momentum to get this much needed reform on its way to 1600 Pennsylvania Avenue.
I get that most Americans are frustrated with Congress and its lack of progress on reforming our tax code. Politics and posturing continue to complicate what should be simple process and in an effort to combat those Washington roadblocks, I’ve been taking additional steps to push Congress into action on this critical issue.
Which is why this past week I introduced a resolution to Congress to build consensus around ten simple principles that our new tax code should uphold. I believe establishing this framework will give us much needed direction as we move to rewrite our tax code.
The last meaningful reform of the tax code was in 1986 under President Ronald Reagan -- 31 years ago. In its current version, our tax code is nearly 2.4 million words in length. Not only does this make it incredibly complicated, but also very time consuming and expensive to comply with. Americans spend an estimated $409 billion dollars and 8.9 billion hours each year to file their taxes in compliance with the law. By any measure, that’s ridiculous. Hard working Americans need to be able to keep more of that time and money and spend less of it determining how to hand it over to the IRS.
Unsurprisingly, our outdated tax code hurts the ability of business to compete in the global economy. Today, the U.S. has the highest corporate tax rate in the world. Aside from making it harder to compete, extremely high rates incentivize businesses to move to countries with lower tax rates. And the ultimate cost of our high corporate tax rate doesn’t fully fall on business. Rather, costs get passed along to the American people in the form of higher prices for consumers, low or stagnant wages for workers, and less job opportunities for job seekers.
Below are the ten core principles I believe are essential to bring our tax code into the 21st century:
1. Make taxes simple, fair, and easy to understand
2. Raise the standard deduction, increase the child tax credit, and lower tax rates
3. Create cuts that touch all individuals and leverage higher rates of economic stimulus
4. Stop special interests from winning at the expense of the middle class
5. Make America the best place in the world to hire, invest, and grow
6. Support family business by not allowing the “death tax” to crush the American Dream
7. Retool the tax code to give American workers a level playing field with their foreign competitors
8. Switch to a territorial system that encourages companies to bring their profits back home to America
9. Encourage following regular order to ensure the greatest likelihood of success
10. Encourage all Americans to call on Congress and demand delivery of this once-in-a-generation opportunity to put America first.
When tax reform legislation passed under President Reagan in 1986, a man named James Baker was the Secretary of the Treasury. I had a chance to meet with Secretary Baker and he reminded me that during the 1980s, tax reform was also the biggest legislative story of its time, and the obstacles to its success were just as formidable. Mr. Baker also offered me a piece of advice: He told me that 1986 tax reform happened and was successful because of the support of President Reagan.
Tax reform has been a top priority of mine during my six years in Congress and today, I proudly repeat the advice of Mr. Baker. We need a 21st tax code that keeps business here, grows the economy, and allows the American people to keep more of their hard-earned pay. Achieving this goal will only be possible with a unified vision from Congress and continued support for President Trump’s leadership in this legislative imperative for America’s economy.