HOUSTON (CN) – The chairman of the House Ways and Means Committee and a chief architect of Republicans’ tax-reform plan claimed Wednesday the plan would simplify the law so much that most Americans could file their taxes by filling out 15 lines on a return the size of a postcard.
At a lecture hall at Rice University in Houston, U.S. Rep. Kevin Brady, R-Texas, told a crowd of around 60 people that “tax reform is the legislative challenge of a generation” and touted the Republican plan’s goal to “deliver the lowest tax rates in modern history for businesses of all sizes.”
Brady represents a district just north of Houston that includes large cities with affluent residents, many of whom work in the oil and gas industry, and rural areas where the pine trees outnumber the people.
He prides himself on keeping close tabs on his constituents. He said he’s averaged 50 town hall meetings in Texas per year since he was elected to the U.S. House of Representatives in 1990.
But now, he said, he’s holding these meetings nationwide to try to sell the public on what he and other GOP leaders call their “unified framework” for overhauling the U.S. tax code.
“For the first time in over 30 years, we have a president, House and Senate who are all committed to overhauling the way Washington taxes our families and our businesses. And with the release of a unified framework just weeks ago, we have taken a significant step forward in getting tax reform to President Trump’s desk by the end of this year. We all recognize this is a crucial moment in America’s history,” he said Wednesday.
With his trademark smoothly shaved head shining under klieg lights, Brady said that under the Republican plan, 95 percent of Americans will be able to file a return that’s no bigger than a postcard, and that the plan will retain tax credits for people working full time and paying to put their kids through college while adding tax credits for parents of students in trade schools.
Economist Douglas Holtz-Eakin joined Brady on the stage for the “Reforming the Tax Code” discussion that cost $50 to attend.
A former director of the Congressional Budget Office, Holtz-Eakin was also the policy director for Arizona Sen. John McCain’s presidential campaign in 2008.
He emphasized why a postcard-sized return would be better than the current system that can be staggeringly complex, even for working-class families.
“I hear a lot of people say ‘Well who cares about the postcard, I use Turbo Tax.’ The reason the postcard is important is that the whole tax code is right there and you can see it and there’s a tremendous suspicion in America that the other guys have access to provisions that you don’t have access to, and that the code is fundamentally unfair. That goes away if you simplify it,” Holtz-Eakin said.
The plan’s most often cited revision is to reduce the corporate tax rate from 35 percent to no more than 25 percent so large corporations will stop moving their operations overseas to countries with a lower tax rate, such as Ireland, which entices corporations with a 12.5 percent tax rate.
Both Brady and Holtz-Eakin said the status quo is hurting the U.S. economy and the Republican plan is all about growth.
“There’s really only one way to evaluate how successful tax reform is, how much growth we will get,” Holtz-Eakin said. “I always try to remind people that from the end of World War II to 2007, this economy grew rapidly enough that even with the arrival of the baby boom generation, income per capita doubled on average every 35 years, one working career. So that was the route to the American Dream.”
He added, “At present, given population and economic growth, it’s going to double over 70 years. Over twice as long. The American dream is just disappearing over the horizon. So the only way to evaluate success is growth, because growth is what the middle class needs.”
Critics says the Republican plan could raise the federal budget deficit by trillions of dollars, and its elimination of the estate tax and lowering of the top
tax bracket from 39.5 percent to 35 percent, which would apply to people earning $418,000 or more, favors the rich.
But Brady told the story of one of his constituents whose family owns a farm in Livingston, 74 miles northeast of Houston, to show the estate tax is unfair.
“They’ve gone to the bank three times to borrow money to pay the IRS for the estate tax just to keep the same family farm, they’ve worked it for generations,” he said before taking a sip from a can of Diet Coke on the table next to him.
Brady sounded optimistic when asked by a man in the audience what the odds are of passing something close to the Republican blueprint within six months.
“Pretty high,” he answered. “Our timetable is to get this to the president’s desk by the end of the year. It all pivots off the budget…once that’s signed, sealed and delivered, once it creates the runway for us to land tax reform… It is an ambitious timetable. President Reagan’s reforms took 2.5 years and we’re really accelerating that, but that is why that unified framework between the president, the House and Senate that created those key elements we’re driving to…that’s why that’s so important.”
Brady added, “There’s no doubt this is a big challenge, but I’m convinced this country is ready for it.”