August 29, 2012
Pro-Growth Tax Reform
- The tax code has become a broken maze of complexity and political favoritism, overgrown with special-interest loopholes and high marginal rates that stifle economic growth and job creation.
- This budget reforms the broken tax code to spur job creation and economic opportunity by lowering rates, closing loopholes, and putting hardworking taxpayers ahead of special interests. The pro-growth reforms ensure the tax code is fair, simple, and competitive.
- This budget consolidates the current six individual income tax brackets into just two low brackets of 10 and 25 percent and repeals the Alternative Minimum Tax.
- This budget reduces the corporate rate to 25 percent and shifts from a “worldwide” system of taxation to a “territorial” tax system that puts American companies and their workers on a level playing field with foreign competitors.
- This budget rejects the President’s call to raise taxes. Instead, it broadens the tax base to maintain revenue growth at a level consistent with current tax policy and at a share of the economy consistent with historical norms of 18 to 19 percent in the following decades.
Tax reform: This budget would focus on growth by reforming the nation's outdated tax code, consolidating brackets, lowering tax rates, and assuming top individual and corporate rates of 25%. It maintains a revenue-neutral approach by clearing out a burdensome tangle of deductions and loopholes that distort economic activity and leave some corporations paying no income taxes at all.
This is America's moment to advance a plan for prosperity. Our budget offers the nation a model of government that is guided by the timeless principles of the American idea: free-market democracy, open competition, a robust private sector bound by rules of honesty and fairness, a secure safety net, and equal opportunity for all under a limited constitutional government of popular consent.
We can reform government so that people don't have to reorient their lives for less. We can grow our economy, promote opportunity, and encourage upward mobility. This budget is the new House majority's answer to history's call. It is now up to all of us to keep America exceptional.