Comprehensive tax reform esssential to growth
President Trump’s reasserted commitment he’d work with Congress to pass “huge” comprehensive tax reform – and, “soon” – sent the three main U.S. indices of stock market (the Down Jones Industrial Average, Standard & Poors 500 Index, and NASDAQ) into fits of joy, achieving never-before reached heights of confidence. If the President intends to enact the tax-reform blueprint that House Speaker Paul Ryan & House Ways and Means Committee Chairman Kevin Brady’s have developed, anyone that wants to see Nevada continue its economic recovery will surely rejoice.
America’s current corporate tax code – unchanged since 1986, and the third highest in the world at 35 percent – is outdated, too high, and too burdensome to navigate. It stifles growth, discouraging investment, and slows the creation of new jobs. For the hundreds of Nevada businesses who sell their products in the global marketplace, it hampers their ability to compete against foreign counterparts that are subject to a much lower global average tax rate of around 22.5 percent; a rate that has continued to come down from a 33 percent high in 2003.
While the rate alone is burdensome enough, the regulatory framework of our federal tax code has grown to unmanageable proportions, requiring an entire industry of outside accounting and legal assistance, even for very small businesses. It’s a massive drain on resources and completely counterproductive. In fact, the non-partisan National Taxpayers Union recently quantified the compliance cost to the U.S. economy each year from the federal income tax at a whopping $233.8 billion in productivity, and more than 6.1 billion hours of total labor time. Americans can’t afford that. Nevada’s small businesses sure can’t if they hope to keep creating badly-needed jobs.
The Ryan-Brady plan takes a bold approach to comprehensively reforming the entire system. It will lower the corporate rate to 20 percent, cap the small business tax at 25 percent, and enact immediate expensing for capital investments by corporations and small businesses. It also achieves an industry-neutral posture by ensuring that all rates and regulations are applied uniformly; no sector is singled out for punitive measure, regardless of its success. This is particularly relevant here in the Silver State.
From our roots as a heavily agricultural region, we have happily blossomed into a magnet for huge manufacturing companies like Tesla and data centers like Switch and Apple. In the future, it’s to all our benefit that we continue to attract more industries, and more developments on the order of the Tahoe Reno Industrial Park, the world’s largest industrial park, which represents major job-creation and state-revenue. Lest we forget, all of these industries are reliant on fuel and other types of energy, and they find our state attractive precisely because we have a competitive, stable energy market. The Ryan-Brady plan will help us to preserve that essential business-magnet.
All told, the Ryan-Brady plan has been projected by the nonpartisan Tax Foundation to “raise American GDP by 9.1% in the long run, lift wages by 7.7% and add some 1.7 million jobs.” That’s a prescription for American – and Nevadan – success.
Next time you speak with our great Senator Dean Heller, take a moment to thank him for his leadership, and ask that he please encourage his congressional colleagues to adopt the Ryan-Brady plan, or something much like it.
Jim Wheeler is the Republican Assemblyman representing Douglas, Storey, and regions of Lyon County.