Every new administration is full of a plethora of policy priorities.
The Trump administration has an excess of good priorities, and members of Congress would be smart to capitalize on them early by delivering a comprehensive tax reform package to the president’s desk. They could hardly improve upon “A Better Way,” the comprehensive, industry-neutral, pro-growth, pro-jobs plan designed by House Speaker Paul Ryan and House Ways and Means Committee Chairman Kevin Brady. It’s exactly what Nevada and America need to infuse our economy with investment, jobs, and long-term sustainability.
It was heartening recently when President Donald Trump reiterated his commitment to working with Congress to pass “huge” tax reform in the near term. If ever there was a subject that defied hyperbole, it’s the U.S. federal tax code. Unchanged since 1986, the corporate rate (combined state and federal, the highest of the industrialized world, at 39 percent) is “outrageous”, “exorbitant”, and “confiscatory,” while the regulatory framework in which it sits is beyond “onerous,” and has now achieved “monstrous” proportion.
I hear it from current business owners all the time, and recall it intimately from my former role as a job-creator in the state: the too-high federal corporate rate suppresses initiative and innovation, and makes reinvestment and the hiring of more employees exceedingly difficult. And for those who sell their products on the international market –and there are many here in the Silver State who do – the disparity between the U.S. federal rate and the one our foreign competitors enjoy (the top global average rate has steadily declined from a 2003 high of 33 percent to a current average of 22.5 percent) means we operate at a significant disadvantage on the global stage. And that’s before one calculates the cost of compliance.
One of the added benefits of the House blueprint is a provision to employ a destination-based cash flow tax system, a trade neutral approach to taxation that would ensure foreign imports no longer benefit by tax favoritism and American-made exports would not face discriminatory tax treatment across our borders. Nevada’s business community would benefit from major Fortune 500 locally-based companies such as MGM Resorts International or Las Vegas Sands for example – or other small businesses – would enjoy a level playing field as their services would not be penalized when sold and exported overseas.
All told, the non-partisan Tax Foundation projects that the Ryan-Brady tax reform blueprint “would raise American GDP by 9.1 percent in the long run, lift wages by 7.7 percent and add some 1.7 million jobs.” It would accomplish that by, among other things, slashing the corporate rate to a flat 20 percent, reducing the small business rate to 25 percent (the lowest since WWII). Significantly, Ryan-Brady would also institute across-the-board fairness and uniform rate application; no more punitive measures for successful sectors.
The Ryan-Brady plan will reinvigorate this economy, encourage investment, create jobs, and increase our strength in the worldwide market. Please, Congress, get busy.
Cresent Hardy, a former business owner and job creator, served in the Nevada State Assembly, and a former U.S. Representative for Nevada’s 4th Congressional District.