Americans want, need, and deserve an economy that works for them. That’s why, as a free market conservative, I’ve been fighting for policies that will help grow the economy and create good-paying jobs such as providing commonsense regulatory relief and reforming our outdated and uncompetitive tax code.
Speaking of our tax code, tax-writing Ways and Means committee (of which I’m a member) has been hard at work to reform our tax code. Make no mistake about it, we need to do tax reform – and the sooner the better.
On November 16, 2017, the House took an important step towards tax reform by passing the Tax Cuts and Jobs Act (H.R. 1). American families need tax relief that rewards their hard work and boosts the economy through pro-growth business reforms. H.R. 1 also seeks to make the tax code simpler and fairer. Notably, the bill would enable the vast majority of Americans to file their taxes on a postcard-size return. The current tax code is simply too complicated, costing Americans valuable time and money when it comes to compliance.
As for businesses, the bill would lower rates as well as fundamentally reform the current international tax regime. Currently, the U.S. has the highest corporate tax rate in the developed world. While the U.S. corporate tax rate is 35 percent, the average rate in the developed world is nearly 25 percent. Moreover, unlike our major trading partners, the U.S. actually taxes foreign earnings when they are brought back into the U.S. because we still have a worldwide tax system. As a result, we see are seeing American businesses keep their foreign earnings overseas and leave our shores in order to take advantage of lower tax rates abroad.
In an effort to make the U.S. a welcome home for business, the H.R. 1 proposes to:
Going to a territorial system would make it easier for U.S. businesses to compete in today’s global economy while at the same ending the tax penalty on foreign profits brought back to the U.S. Profits that could, for example, be used to hire more workers! Meanwhile, cutting the corporate tax rate will only help make the U.S. a more attractive place to do business.
Bottom-line, we must simplify our complicated tax code to save Americans time and money when it comes to doing their taxes. And we need fundamental business tax reform in order to better compete in today’s global economy.
As Congress takes the next steps toward tax reform, I will continue to do everything I can to make tax reform the best it can be. Reforming America’s complicated and broken tax code is too important to not get right.