Yesterday, the Tax Foundation released new state-by-state figures showing that the House tax reform Blueprint would create roughly 1.7 million new full time American jobs, including more than 140,000 in Texas. As Ways and Means Chairman Kevin Brady (R-TX) explains in an op-ed this morning for the Orlando Sentinel, incorporating “border adjustability” as part of pro-growth tax reform – a move that will finally end the “Made in America” tax – is essential to job creation, higher wages, and improving our ability to compete and win around the world.
Chairman Brady’s op-ed is below. To read online, please click here.
The American people need an economy that works for them. The only way that will happen is if we have a tax code that rewards Main Street job creation, empowers our businesses and workers, and allows people to keep more of their hard-earned money.
Instead, we now have a tax code that rewards Washington special interests and empowers our international competitors.
House Republicans have a bold plan to completely overhaul America’s broken tax code. According to estimates from the independent Tax Foundation, our proposal will support the creation of more than 97,000 full time jobs in Florida over the next 10 years, and grow Floridians’ median after-tax incomes by over $4,000.
Over 30 years have passed since America last overhauled its tax code. Since then, our international competitors have taken significant action to make their tax systems more competitive for their businesses and workers. Meanwhile, the U.S. tax code has fallen incredibly far behind – and American workers have watched their jobs move to countries with more competitive tax systems.
Today, our competitors are outperforming us in three crucial areas:
First, America has the highest corporate income tax rate in the developed world. Currently at 35 percent, it’s at least 10 to 15 points higher than most of our major international competitors, making it more difficult for our businesses to compete globally and create good-paying jobs at home.
Second, America continues to fall behind because, unlike our competitors, we force our global businesses to pay U.S. taxes on their foreign earnings. Our current tax system encourages U.S. businesses to leave profits overseas or use them to expand foreign operations rather than investing the money to grow jobs and wages in our communities.
Finally, our broken code results in unfair double taxation of “Made in America” products. Using a “border adjustable” approach, our competitors take taxes off their own exports when their products are sold in America, and they add taxes onto American products sold in their countries. Ultimately, this means American exports are subject to full U.S. taxes plus tax in the foreign market. In contrast, imports come into America with foreign taxes removed and bear no U.S. tax.
As a result, our businesses, workers, and products are at a tax disadvantage here at home and throughout the world. Japanese tech products have a tax advantage over Florida tech products. Mexican agriculture is favored over Texas agriculture. The list goes on.
These tax disadvantages distort true competition, rewarding work that is outsourced instead of boosting productivity and wage growth for Americans. Entire communities can be devastated as our tax system encourages businesses to move jobs and manufacturing facilities abroad.
We cannot afford to settle for a broken tax code that drives jobs overseas and rewards foreign products over “Made in America” products. We need a completely redesigned tax system that provides American businesses and workers with the greatest opportunity to compete and win.
Our plan will lower the U.S. corporate tax rate from 35 percent to 20 percent. We eliminate the tax barriers preventing American businesses from bringing home foreign earnings to invest in our communities. And, when it comes to imports and exports, we propose a simple and powerful solution: fair and equal taxation.
Under our border adjustable approach, all products sold in America will be taxed at a low, equal rate – regardless of where the product is made. No more tax advantages for foreign products at the expense of American businesses and workers. No more tax incentives to move jobs or manufacturing plants overseas.
This fair approach will restore true competition in America, empowering our consumers and workers by making businesses compete harder on price, quality, and service. And, when combined with all of the historic solutions in our plan, it will establish our nation as a 21st-century magnet for job growth and economic development.
This year, we have a once-in-a-generation opportunity to unleash American competitiveness through pro-growth tax reform. Let’s go bold and deliver a tax code that finally helps our businesses and workers succeed.
Congressman Kevin Brady represents the 8th District of Texas and serves as chairman of the House Ways and Means Committee.