Columnist: House Ways and Means Chairman Kevin Brady solution to ‘growth-igniting tax reform’
Pulitzer Prize-winning political journalist George Will in a recent syndicated column says House Ways and Means Committee Chairman Kevin Brady (R-Texas) holds the key to unlocking America’s earning potential.
If there is going to be growth-igniting tax reform — and if there isn’t, American politics will sink deeper into distributional strife — Brady will begin it. Fortunately, the Houston congressman is focused on this simple arithmetic: Three percent growth is not 1 percent better than 2 percent growth, it is 50 percent better.
If the Obama era’s average annual growth of 2.2 percent becomes the “new normal,” over the next 50 years real gross domestic product will grow from today’s $16.3 trillion (in 2009 dollars) to $48.3 trillion. If, however, growth averages 3.2 percent, real GDP in 2065 will be $78.6 trillion. At 2.2 percent growth, the cumulative lost wealth would be $521 trillion.
Brady, however, would like to start with the approximately $2 trillion that U.S. corporations have parked overseas. Having already paid taxes on it where it was earned, the corporations sensibly resist having it taxed again by the United States’ corporate tax, the highest in the industrial world. “[The $2 trillion] won’t just naturally fly back to us,” Brady says. Measures should be taken to make it rational for corporations to bring money home. And to make it rational for corporations such as Pfizer, which recently moved its headquarters to Ireland for tax purposes, to remain here.
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