“The House bill and the Senate bill are not identical but are very much on the same page, according to Alex Brill, a resident fellow at AEI, a conservative think tank. Most changes will be technical in nature and carried out by the conference committee. According to Brill, reconciliation might take longer than lawmakers have predicted, but he is confident that the differences will ultimately get resolved.”
Federal fiscal reform in the United States is increasingly necessary but over the last two decades has remained elusive. Part of the reason for the inaction reflects different political preferences and priorities. Part of it reflects differing views about the possible economic and social effects of controlling public spending and fiscal deficits. The result is that the US federal debt continues to grow unabated, which poses an increasing threat to future generations of citizens.
Both the House’s tax bill and the Senate Finance Committee’s bill slash the corporate income tax rate from 35 to 20%, a much needed reform that will pull capital into the United States and grow the economy. Thankfully, both bills cut the corporate rate on a permanent basis.
Following his remarks, Chairman Brady joined AEI’s Alex Brill for a discussion on the potential opportunities and impacts of tax reform. Mr. Brill asked Chairman Brady about the features of the Tax Cuts and Jobs Act and the ways in which the act would affect different individuals. Mr. Brill discussed the significance of the corporate tax rate cut and the change in standard deduction that tax reform would bring. Chairman Brady concluded by emphasizing the importance of moving to a simpler tax system.
I believe that the current US tax code imposes drag on US economic growth and alternatives to the current system could result in an increase in the capital stock, a boost in worker productivity, and thus an increase in wages. This positive economic result would occur slowly over time as new investment is deployed and workers adopt to new opportunities.
