As of Tuesday, December 16, 2014
One of my top priorities in the new Congress remains reforming our nation’s overly burdensome tax code as part of creating a competitive, national economy that encourages innovation and job growth. As I travel our state, many Idahoans ask me can Congress find consensus to reform our tax code and to pay down our massive national debt. The answer is we are making some progress on key principles, but we need Idahoans and all Americans to push for agreement to get the job done.
Congress cannot continue to kick the can down the road. The temporary tax policies enacted by Congress create inefficiency. Subject to renewal, their expiration and sometimes retroactive extension create uncertainty for American families and businesses. Plans to increase jobs and expand are put on hold when unclear tax liability lingers. While many of our international competitors have taken steps to create strong and stable incentives for research and development (R&D) in their tax codes, U.S. companies continue to be disadvantaged in their long term planning, as the U.S. R&D credit has faced continued year to year uncertainty as to its status. While different U.S. businesses and industry may have their own particular priorities when it comes to comprehensive tax reform, one area of unanimous agreement is that, if Congress can succeed in providing some much-needed certainty and stability, it can lead to a surge of new growth and investment for American businesses and American jobs.
We need to move away from the current tax code with its shortcomings, inefficiencies and waste. The most efficient and simplified tax system would be to transition to a low unified flat tax. If this is not achievable, we should completely redesign the tax code with an emphasis on lower rates, broadening the base, reducing complexity and eliminating anti-competitive provisions. In either approach, the tax reform process must take into account the dynamic effects of pro-growth reform, which would lead to a measurable increase in economic growth and dynamic revenue.
The Bowles-Simpson Commission, on which I served, outlined proposals that create fairness in the tax code, are pro-growth, and unleash the dynamic potential of our economy. Such comprehensive tax reform would eliminate much of the complexity in the current code and lower rates for all individuals, families and businesses. Embracing this new paradigm can help generate additional revenues and economic growth and put America’s tax code in a more competitive posture.
My tax reform principles build on the “clean slate” approach I first endorsed as a member of the Bowles-Simpson Commission. Basic framework principles must be resolved before we can effectively evaluate each credit, deduction and exemption in the current tax code to determine which provisions have a policy justification for being added back to the blank slate tax code, at the expense of proportionately higher rates for all taxpayers.
Our tax code is too long, complex and anti-competitive to serve as the long-term foundation for the economic growth our country needs. Without structural reform, our potential growth and revenues will be lost. Work must continue to deliver a tax code that meets the challenges of our modern economy. We must simplify the tax code and lower tax rates to help boost innovation and growth. I will continue to make comprehensive tax reform, along with structural entitlement reform, my top fiscal priorities as we move forward into the 114th Congress.