Conroe Courier - Brady, Ryan Push "Better Way' For Tax Reform

News Article

By Stephen Green

The House GOP members announced the final leg of a six-part plan designed to show Americans a "Better Way" on how to reform the tax code.

Speaker Paul Ryan, R-Wisconsin, announced the Better Way plans along with other Republicans including U.S. Rep. Kevin Brady, R-The Woodlands, who will pick up the proposal and run with it as chair of the tax-writing Ways & Means Committee.

The lawmakers made the announcement at a news conference Friday morning.

"It will take less from taxpayers at every income level, because Washington takes too much of your hard-earned dollars," Brady said, promising the plan will "make it easier to save for retirement and grow the local economy."

The plan essentially tries to do three things: simplify the tax code, promote job and economic growth, and reform the Internal Revenue Service.

A major part of the proposal would lower tax rates for both families and businesses, although it falls short of the 25 percent top rate for individuals that Ryan promised not long ago.

Instead, the tax reform plan proposes a 33 percent top tax bracket instead of the current top rate of 39.6 percent restored by President Barack Obama in a 2013 victory over Republicans following his re-election. The plan lacks the detail required to measure whether it would maintain the current distribution of the tax burden by income range.

Individual filers would retain tax breaks for mortgage interest, charitable giving, and retirement savings in a decision that reflects the sweeping popularity of such measures. But retaining them would result in revenue losses that would mean rates cuts couldn't be as big as once promised.

It also includes reducing the tax form to something "as simple as a postcard" for more Americans, creating a larger standard deduction and larger child and dependent tax credits for families, eliminating the alternative minimum tax, and eliminating the estate tax -- a key item on Brady's agenda.

Regarding jobs and growth, the plan includes cutting taxes on small businesses to 25 percent for some; allowing deductions of 50 percent of the dividends, capital gains and interest received from stocks and mutual funds; and reducing the corporate tax rate to a historic 20 percent.

The IRS -- a target for Republican lawmakers -- would have an unsurprising overhaul under the conservative plan. It would include reorganization into three units; installing a new commissioner; creating an Office of Dispute Resolution; and "modernizing" information systems.

Tax reform is a longtime promise of Republicans, and the code has gotten far more complex in the three decades since the landmark 1986 tax overhaul. But changing the code pits powerful interests against one another and exposes ideological rifts among Republicans and between Republicans and Democrats.

"At this urgent moment in history, as America struggles to regain its standing in the world and Americans struggle to regain their standard of living, we can't afford to continue to struggle under this tax code," Brady said. "House Republicans believe it's time for a change. It's time, America, to let your voice be heard … if you want America to be the strongest economy on earth for you and your children, it's time to speak up. Loudly."

The measure assumes the proposal would generate economic growth that would, in turn, boost revenues. Such "dynamic" effects permit policymakers to promise even lower tax rates that would not add to the budget deficit.

The Associated Press contributed to this report.

Source