On March 22nd, Members of the Tax Policy Subcommittee, led by Rep. Charles Boustany (R-LA), held the first in a series of hearings on how policymakers should fundamentally reform America’s tax code to create jobs, increase paychecks, and expand opportunities for the American people.
Chairman Boustany said:
“As we focus on tax reform, we want to take a fresh look and consider all ideas and proposals … The Ways and Means Committee must weave the most pro-growth concepts and ideas into a bold plan that fundamentally and comprehensively reforms our tax system.”’
Representatives Devin Nunes (R-CA), Michael Burgess (R-TX), and Rob Woodall (R-GA) made the case for moving our primarily income-based tax system to a cash-flow or consumption-based system. Under these plans, instead of being taxed on what they make, hardworking Americans and businesses will be taxed on the money they spend.
Rep. Nunes discussed how taxing a business based on its cash-flow – rather than its income – under his American Business Competitiveness (ABC) Act encourages investment, spurs innovation, and helps small businesses:
“Companies of any size, no matter how they’re organized, would pay no tax on any of their spending for personnel, equipment, property, or any other expenditure related to the operation of their business in the United States. Today, the income tax penalizes new investment, but the ABC Act would eliminate that penalty, rapidly spurring economic growth.”
Rep. Burgess explained how his Flat Tax Act would simplify our current complicated tax system and make it easier for Americans to file their taxes. He specifically noted how his bill gives taxpayers the choice to opt-in to the new tax system if they are unhappy with their current tax rate:
“I want to help every American. We have made life so difficult for the average citizen with our tax code … [with the Flat Tax] you could fill out a simple return, and then everyone of the same income level would pay the same amount … The other thing that’s different in the bill I’ve introduced, H.R. 1040, is that it’s voluntary. If you like your tax, you can keep your tax.”
And Rep. Woodall highlighted how the FairTax Act would help families move up the economic ladder and achieve the American dream:
“Eighty percent of American families pay more in payroll taxes than they pay in income taxes. Yet, we seem obsessed with the income tax code. If you really want to help working families move up that ladder, you have to deal with the payroll tax code. The FairTax does that.”
Stay tuned for the next hearing in our series on April 13th which will be focused on fundamental reforms within the context of an income-based tax system.