Three decades after President Reagan signed the largest tax reform in our country’s history into law, our tax code is once again desperately in need of a pro-growth overhaul.
The good news is tax reform is at the forefront of our agenda, and a framework is in place. It will still be a heavy lift, as it should be, but we need to get it done.
This is a once-in-a-generation opportunity we have been building toward for years. Since 2011, the Ways and Means Committee has held more than 40 hearings on tax reform. This year’s hearings have focused on specific aspects of our plan, from increasing U.S. competitiveness in the global marketplace to growing small businesses.
Among other insights gleaned from these hearings, one theme has remained clear: We cannot afford to wait any longer to reform our tax code. This is why we are committed to enacting tax reform this year. In fact, leaders from the House, the Senate, and the Trump administration issued a statement at the end of July declaring a united front and shared vision for moving forward.
Our plan for tax reform will lower rates, decrease the number of tax brackets, and increase the standard deduction so Americans can keep more of their paychecks.
Due to the complexity of our current tax code, Americans spend 2.6 billion hours each year filing individual income tax returns, with an annual compliance cost of $99 billion. This is an enormous economic drain. Our plan would expand the standard deduction and simplify the filing process to allow about 90 percent of Americans to file their taxes on a form the size of a postcard.
Nebraskans have continually called for the elimination of the death tax, which threatens farmers, ranchers, and small business owners. These producers and entrepreneurs take pride in their hard work, and many want future generations to continue it. The government should encourage their efforts, not stand in their way, and our plan will end this damaging tax once and for all.
Tax reform will benefit Americans across the country, but it is especially important to the livelihood of our rural economy. As the American Farm Bureau Federation observed, “Many of the provisions of the tax reform blueprint will be beneficial to farmers, including reduced income tax rates, reduced capital gains taxes, immediate expensing for all business inputs except land, and the elimination of the estate tax.”
To reap the greatest economic benefits of revamping our tax code, we need to focus on bold, permanent reforms. The certainty achieved through permanent reforms has the potential to drive double the economic growth as short-term tax cuts – which means more jobs, higher wages, and a healthier economy.
It has been 31 years since the last significant tax reform. Throughout the 31 days of August, the Ways and Means Committee is highlighting 31 reasons why we need tax reform this year. Check out the list at WaysandMeans.house.gov/31Reasons, and please continue to share your thoughts with me as we work to create greater opportunity through a simplified tax code.