Tax reform 2.0 is like a regular check-up for our healthy economy
Washington, October 2, 2018/UploadedPhotos/HighResolution/62e00b1d-1630-4653-a3b8-9ef6f1685194.jpg
This piece originally appeared in the Washington Examiner. You can read it here.
As a doctor in Cincinnati, I advised my patients to see me regularly so that I could reliably monitor their progress. Like most doctors, I will tell you that regular checkups are the key to healthy living so we can stop any potential problems before they snowball into major issues. I have found that the same approach can be used in governing, which is why Congress not only has the authority to write laws, but also has the responsibility to conduct effective oversight of how laws are working for everyone.
Like a doctor regularly checks in on his or her patients, Congress should routinely examine our tax code for strengths to reinforce and deficiencies to correct. For something so deeply connected to the health of the economy, it seems irresponsible to update our tax code only once in a generation.
When people failed to see the benefits of the sluggish "Obama Recovery," Congress slashed tax rates with the Tax Cuts and Jobs Act. Today, the national economy is outperforming projections made during the Obama years, and even outpacing estimates made since tax reform was signed into law. Now is the time to set a new precedent in Washington: a nimble tax policy, constantly updated and responding to the needs of families and businesses. The House began charting this path forward with the passage of Tax Reform 2.0, our follow-up to the Tax Cuts and Jobs Act signed into law in December.
My colleagues and I on the Ways and Means Committee developed this update to the tax code by looking at what weaknesses still exist within our tax system and settled upon a major concern for everyday people: uncertainty. Planning for retirement or saving for your children's education is a decades-long process, difficult to predict even for financial professionals. Constant uncertainty about higher taxes coming around the corner does not work and makes long-term planning even more difficult. Individuals of all income levels experienced lower tax rates with the Tax Cuts and Jobs Act, and Tax Reform 2.0 makes those lower rates permanent, allowing more people to keep more of their hard-earned money. We know that young families can be particularly anxious about an uncertain future, so we want to protect family-friendly provisions like the doubled Child Tax Credit and Paid Family Leave Tax Credit.
Despite economic gains, nearly half of working-age adults say they do not expect to have enough savings to live comfortably in retirement. About 40 percent of Americans say they would not be able to cover an unexpected expense of $400. Tax Reform 2.0 expands access to savings vehicles to prevent such circumstances. Some provisions make it easier for small businesses to offer 401(k) plans, while others exempt small retirement accounts from mandatory payouts. Savings plans specifically centered around families include new Universal Savings Accounts and expanded 529 Education accounts that can be used to pay for apprenticeship fees or help pay off student loans. These reforms offer flexibility for families — to save when able and spend when needed.
Maybe the most overlooked feature of Tax Reform 2.0 with the greatest potential for change are the small business reforms. American small businesses have a history of driving innovation. We owe much of our quality of life, not to mention GDP, to small business innovators — so why are we making it harder for them to get off the ground? House Republicans want to allow new businesses to write off more of their start-up costs and invest in research and development without getting dinged by limits on tax credits. Investing in innovation is an investment in America’s future standing as a technological and economic model for the world.
That’s what our package of bills come down to: an investment in the economy, in family, and retirement savings, and in our collective future. Critics may say that the atmosphere in Washington is not "politically viable" to pursue this legislation, but this attitude is wrong. It is never a bad time for good policy, and we should have begun the process of continually updating our tax code a long time ago.
Regular checkups, regular treatment. That’s what our tax code needs, and that’s what Tax Reform 2.0 achieves.