Congress returns from the Fourth of July break with many accomplishments on the regulatory front but with a healthcare reform bill languishing in Senate. Beltway Democrats like Elizabeth Warren can barely contain their glee at what they perceive as a difficult pace of change. But their euphoria is misplaced. I believe Congress will pass health reform and tax reform for one simple reason: The American people don't want resistance. They want results.
Democrats are oddly convinced they are winning when they keep losing. In the four post-Trump special elections Democrats are 0 for 4. That is not momentum. That is failure. My special election in Kansas was one of those four races, along with contests in Georgia, Montana and South Carolina.
The takeaway from my race and the other special elections is voters want Congress to solve problems and pass reforms that improve their daily lives. They want practical results. The House has already passed healthcare reform, and I'm confident a bill will make it to the president's desk. In the meantime, Congress can engineer tax reform by following a blueprint similar to one embraced by House Ways and Means Committee Chairman Kevin Brady, R-Texas, House Speaker Paul Ryan, R-Wisconsin, and many of my colleagues.
That blueprint is based on three principles: competitiveness, fairness, and simplicity.
The fact is tax reform isn't as partisan or controversial in the real world as it is in Washington, D.C. Today's code hasn't been reformed in 30 years. It doesn't fit today's economy. As Apple CEO Tim Cook, who is no right-wing ideologue, said on 60 Minutes in 2015, "This is a tax code … that was made for the industrial age, not the digital age. It's backwards. It's awful for America. It should have been fixed many years ago. It's past time to get it done."
Cook went further and blasted the Democrat's class warfare arguments as "total political crap."
Speaker Ryan echoed these themes in a speech last month to the National Association of Manufacturers. Ryan explained, "Most people do not realize this, but here in America, eight out of 10 businesses file their taxes as individuals. In fact, most of our jobs come from these new and small businesses. And under our crazy system, successful small businesses pay a top marginal tax rate of 44.6 percent."
The House's blueprint has been widely praised for its ability to improve American competitiveness. As Chairman Brady notes, "An analysis by the Tax Foundation recently quantified the benefits of our blueprint, finding that it will create 1.7 million new jobs, significantly raise wages, and grow our economy by more than 9 percent."
Fairness is another feature of the House's blueprint. Today's code is riddled with special interest giveaways that are essentially tax earmarks or "spending" in the tax code, to quote Martin Feldstein, the chief economic adviser to former President Ronald Reagan. Tax earmarks are tax increases on everyone who doesn't receive the benefit. They keep rates artificially high for everyone to favor the few. Do Bernie Sanders and Elizabeth Warren believe families should be paying higher rates so that officially recognized Eskimo whaling captains – one beneficiary in today's code – can pay less?
The complexity of today's code itself favors the wealthy. Kansans in my district shouldn't have to hire a lobbyist or tax accountant to be treated fairly. In 2016, Americans spent $409 billion simply complying with the IRS code, according to the Tax Foundation. That's an enormous waste of capital that could be going to higher wages and new job creation. The House's blueprint would greatly simplify today's code.
Finally, today's code is designed to create jobs ... overseas. If Democrats want to combat outsourcing, the tax code is the place to start. Our corporate rate is the highest in the industrialized world. Lowering that rate from 35 percent to 20 percent, as Chairman Brady proposes, would be a boon for businesses, families and individuals.
I plan on doing everything in my power to help Chairman Brady craft a plan that's right for Kansas and America. We need to create a code that eases burdens on families and makes our businesses competitive. And I believe we need to encourage and reward small businesses, not demagogue them.
The resistance isn't working because voters want us to get to work and solve the problems that put Donald Trump in the White House and Republicans in charge of both chambers of Congress. Speaker Ryan is right. We have a once-in-a-generation opportunity to get tax reform right, and we can – and must – do it in 2017. That is precisely what we intend to do.
Ron Estes is a Republican member of Congress representing the 4th District of Kansas.
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