WOODALL: Tangible tax reform for America
Tax reform may not be everyone’s passion, but it’s one of those issues that seems to always be at the forefront of our national conversation — certainly in a presidential election year. Whether you’re a teenager receiving your first paycheck, a small business owner weighing the implications of hiring another employee, or the leader of a billion-dollar corporation determining where to build your next manufacturing plant, the tax code impacts you. Irrespective of your politics, it directly affects you and your family in one way or another.
As Americans, we have differing opinions about exactly how we should reform our tax code, but there is agreement that we need a simpler system that rewards hard work and encourages economic growth. So how do we get there? While some advocate nibbling around the edges of a broken and punitive income tax system, I want to replace it entirely with the FairTax (H.R. 25). This is a bill that I introduced to rip our destructive tax code out by its roots, dismantle the IRS as we know it, and implement a simple, one-time national retail sales tax on all new goods and services. The FairTax repeals the payroll tax — the largest tax that 80 percent of American families pay. It repeals estate taxes, corporate taxes, and every single existing tax loophole, exemption and carve-out. By ending favoritism in the tax code we also end Washington’s ability to manipulate the American people through the tax code.
I believe in the FairTax as the foundation for a new era of jobs and prosperity in America. While I don’t currently have the votes in Congress or the support of the President to enact the FairTax, I’m as confident as ever that the day will come. And if you have any doubt, you need look no further than today to see the impact that FairTax supporters across the country have had in shaping the tax reform conversation. Just last month, for example, House Republicans — under the leadership of Ways and Means Committee Chairman and FairTax co-sponsor Kevin Brady — released a tax plan with broad support that has the fingerprints of the FairTax all over it. From dismantling the IRS, permanently repealing the Alternative Minimum Tax and Estate Tax, drastically simplifying tax compliance for American families and more, many core principles of the FairTax are now on the verge of becoming law.
The understanding that businesses don’t pay taxes but rather merely collect them in the form of higher costs to their consumers or lower wages to their employees is a key tenet of the FairTax, and I’m happy to say the House tax reform plan takes an immediate step towards relieving this burden. Small businesses facing a rate as high as 44.6 percent today would see a reduction to 25 percent under the plan, and the full expensing of capital investments would be the norm. The plan ends America’s excessively high, job-killing corporate tax rate and reduces it to 20 percent. I’d certainly prefer a rate of zero so that we could be competitive for even more jobs, but I’m more than willing to move America in the right direction as much as I can today — and then I will come back tomorrow and push for more.
There is no good reason why America should rank last among the world’s developed nations in tax competitiveness, but yet that’s where we stand. While frustrating, America’s plight is far from hopeless. We put ourselves in this punitive position by way of a flawed, misguided tax code, and we can dig ourselves out of this hole by crafting reforms that leverage the American people’s entrepreneurial spirit and work ethic. For too long we have pushed businesses away from our shores; it’s time we welcome them instead. That’s why the House tax reform plan also removes the additional tax penalty associated with American businesses repatriating foreign profits to the United States. Simple, common sense measures such as these will help to unleash the American economic engine, and ultimately benefit everyone on the economic ladder.
We have a tremendous opportunity to accomplish pro-growth tax reform unlike anything we’ve seen in decades, and I couldn’t be prouder of the partnership that has gotten us to this point. I’m excited about what is happening in Washington and all across the country because it reaffirms that the American people are absolutely still in charge. Whether tax reform, national security, or myriad other issues, we as a people are involved; we’re engaging our elected leaders as well as our neighbors; and we’re making a difference in the kind of policies coming out of Washington.
U.S. Rep. Rob Woodall, R-Ga., represents the 7th Congressional District, which includes the majority of Forsyth and Gwinnett counties, and serves as chairman of the Rules Subcommittee on Legislative and Budget Process, as well as serving on the Transportation & Infrastructure Committee, and Budget Committee.