Economic activity is the best revenue plan for America. When people make less, raising rates incentivizes them to move their money and hide it.
Raising rates in a slow economy may work in a static economic model, but in reality it flattens the economy and doesn’t increase federal revenue.
When our tax code punishes companies for moving their overseas profits back to the United States, we encourage them to invest overseas. When we have 73,000-plus pages of tax code littered with exceptions, we create a moment each year when Americans can only hope their taxes are correct but are never certain. When tax rates quickly expire without any sign of future permanent reform, we discourage long-term investment. When the federal government takes half of a person’s assets at death to redistribute it to other families, we devastate a grieving family and encourage them not to save and invest. When tax rates expire and government programs live forever, our system is exactly backward.
Tax reform is long overdue in America. Two years ago, the lame-duck Congress extended all rates for two years to allow the economy to catch up. With unemployment still hovering around 8 percent, it’s time to start fixing the broken code and spurring economic development. I was once told that in the consulting world they say, “If you can’t solve a problem, there is good money to be made in prolonging it.”
Americans’ frustration continues to grow because it appears Washington is filled with people prolonging the problem, rather than solving it. Our nation isn’t looking for another consultant. She is looking for leaders.
Rep. James Lankford, R-Okla., is a member of the Budget, Oversight and Government Reform, and Transportation and Infrastructure committees.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.