Thirty years ago this week President Ronald Reagan signed into law the Tax Reform Act of 1986, landmark legislation recognized as the most sweeping overhaul of the U.S. tax code in our nation’s history. Upon signing the bill into law, President Reagan described the new tax code as one “designed to take us into a future of technological invention and economic achievement, one that will keep America competitive and growing into the 21st century.”
True to these words, the American economy saw remarkable improvements as our nation led the way in developing breakthrough products and technologies. But our tax code also has changed significantly since 1986 — and not for the better. Unlike the American inventions and achievements that have expanded horizons of possibility, our nation’s tax code has become an excessive burden that strangles individual opportunity and economic freedom.
Over the past decade alone, more than 4,400 changes have been made to the U.S. tax code. That equals more than one change per day. Meanwhile, our nation’s tax laws have come to fill more than 70,000 pages, forcing taxpayers to spend an incredible amount of time and money preparing their tax returns each year. A recent study by the Tax Foundation projects that Americans will devote over 8.9 billion hours to complying with IRS tax-filing requirements in 2016.
House Republicans believe that now is the time to move forward with bold, pro-growth tax reform. That’s why, earlier this year, we put forward a detailed blueprint for comprehensive tax reform that will lift the burdens on families and job creators and propel our nation into a new era of economic prosperity and leadership.
This blueprint is the first consensus proposal put forward by House Republicans to overhaul the tax code since the Reagan reform of 1986. And, similar to that legislation, our plan takes action to make the tax code simpler, flatter, and fairer for all Americans.
Our plan eliminates dozens of special-interest loopholes, lowers tax rates for individuals and families, and consolidates the seven income-tax brackets of our current code into just three. Additionally, we improve and streamline provisions that support families, higher education, and charitable giving while also reducing taxes on savings and investment.
These reforms provide unprecedented simplicity. In fact, our blueprint delivers a tax code so straightforward and fair that, for the first time in modern history, nearly all Americans would be able to file their taxes on a form as simple as a postcard.
Above all, our blueprint delivers a tax code that is built for growth — the growth of families’ paychecks, the growth of small businesses, and the growth of our economy as a whole.
Our plan lowers tax rates on American job creators of all sizes so they have more freedom to expand, hire new workers, and energize our local economies. We take bold action to level the playing field for U.S. businesses and workers by transforming our nation’s outdated international tax system into one of the most modern, pro-growth systems in the world.
Not only will our blueprint remove incentives for companies to relocate overseas, it will make American communities the most attractive places in the world to invest, hire, and headquarter a business. That means better job opportunities for our workers, better wages for American families, and a better chance for all Americans to achieve their personal and professional goals.
Put simply, our blueprint is designed to help Americans of all walks of life. For recent college graduates, it increases your ability to find a fulfilling job where you can put your hard-earned knowledge and skills into action. For America’s working families, it delivers the support and economic security needed to save for retirement and put your kids through school. And, for our nation’s small business owners, our blueprint offers more freedom to dream big and go bold in developing that next groundbreaking invention.
Looking back on the tax reform effort 30 years ago, it’s important to recognize the key factors that led to its success. First, the American people were fed up with the tax code and the burdens it imposed on their lives. Second, members of Congress had bold solutions to overhaul the code from top to bottom. Third, President Reagan was committed to leading the charge on pro-growth tax reform.
House Republicans recognize that many of these same factors are present today. We will continue to lead with bold, pro-growth tax reform. For America to see success in this crucial effort, our next president must be equally committed.