Congress is back from Memorial Day recess, and let’s hope they can keep up the tax reform momentum they were building before they departed Washington.
The House Ways and Means Committee held two important tax reform hearings in mid-May – that first examined “How Tax Reform Will Grow Our Economy and Create Jobs,” while the second looked at the hotly debated border adjustment provision of the House GOP’s tax reform plan.
In his opening statement, Chairman Kevin Brady (R-TX) laid out some honest truths about the current state of our tax code and its economic effects:
“America now has one of the most costly, unfair, and uncompetitive tax systems in the world. The need for pro-growth tax reform is urgent. Today’s high tax rates on American businesses drive good-paying jobs overseas and make it more difficult for our job creators and workers to succeed here at home. America’s burdensome international tax system destroys U.S. competitiveness and discourages investment in our communities.”
Committee members heard from a variety of witnesses, including Zachary Mottl, Chief Alignment Officer, Atlas Tool Works, Inc., who had this to say:
“Today, the most difficult barrier to growth American manufacturers face is our self‐inflicted tax code. Much of it was written decades ago, and it fails to account for today’s internationally competitive environment. I realize this will be hard and contentious work. Manufacturers understand that there will be those who argue for simply reducing current tax rates. While a reduction in tax rates may be helpful in the short run, I believe our economy and our citizens need and deserve permanent, comprehensive tax reform . . .”
The testimony of the other witnesses can be found here and it’s well worth a read.
The Committee’s second tax reform hearing was an opportunity for members to weigh in on the border adjustment proposal which has been written about, and debated extensively over the last several months. In his opening remarks Chairman Brady singled out the effects of our high corporate tax rate and use of the worldwide tax system (instead of territorial) to make his case for tax reform, adding that “to vault America from dead last among our global competitors back into the lead pack we also must end the ‘Made in America’ tax.”
The witnesses for this hearing gave their views on the border adjustment provision, making their arguments for and against it with committee members also weighing in.
Debate such as this is healthy and necessary. Reforming the tax code is no easy task and we need to explore various avenues to accomplish it, but to make sure that achieving comprehensive tax reform stays the focus. As Congress gets back into the swing of legislative work, let’s keep the tax reform momentum going.