Republicans have a once in a generation opportunity to pass real tax reform, resulting in a simpler, flatter, and fairer tax code for everyone.
Our guiding principles in this effort should be two-fold: first, letting families keep more of their money, and second, creating a tax code conducive to economic growth.
But some in Congress (whose guiding principle seems to be "more money for the federal government") want to use the tax reform bill to put a whole new tax on American businesses and consumers. This "border adjustment tax" would impose a 20 percent tax on any product brought into the United States, resulting in higher prices for everyday products.
The border adjustment tax would not only apply to finished products, but also to supplies, parts and components that cross the border during the manufacturing process. This results in a big hidden cost that is passed along to American consumers.
Proponents say that adding a border adjustment tax will make sure the tax reform legislation is "revenue neutral." That is Washington-speak for keeping the overall tax burden the same, but changing who pays the bill. It's been my experience that when it comes to changes like this, the "connected class" in Washington typically gets a good deal and the middle class gets a bad one.
Everyone knows our current tax code is broken. Roughly half of the population doesn't participate in the main tax on personal income, and U.S. companies are faced with the highest corporate income tax rate in the world, making us less competitive for jobs and economic growth.
The tax reform bill would simplify the personal income tax system from seven brackets to three, with lower rates that allow ordinary Americans to keep more of their hard-earned money. On the corporate side, rates would be lowered to give U.S. companies a competitive advantage in the world market. Spending cuts and the resulting economic growth will help ensure that these changes to the tax code are deficit-neutral.
But the border adjustment tax stands in the way. It's time that Congress dismiss the idea of the border adjustment tax and move forward with real reform.
Since President Ronald Reagan, Republicans have unified around the principle that people's hard-earned money belongs to them, not the government. We must not buy into the notion that the goal of tax reform is revenue neutrality, and that allowing Americans to keep more of their money is a "cost to government."
The country does not need a new 20 percent tax that drives up the cost of consumer goods. What's needed is a simpler, flatter, fairer and more competitive tax code that lets people keep more of their money. That reform is within our grasp.
Rep. Jim Jordan (@Jim_Jordan) represents Ohio's fourth district in the U.S. Congress. He is the founding chairman of the House Freedom Caucus.
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