PRINCIPLES FOR FUNDAMENTAL TAX REFORM
U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee
America’s individual and corporate tax systems are in need of a significant overhaul that promotes economic growth, fairness and simplicity, and meets the challenges of an increasingly competitive 21st century global economy.
As the Senate Finance Committee begins to undertake the challenge of comprehensive tax reform, Ranking Member Hatch outlined seven guiding principles for reform:
Economic Growth: Tax reform should significantly reduce much of the economic distortions within the current income tax system and eliminate the anticompetitive nature of the current code.
Fairness: Tax reform should eliminate or reduce the number of tax preferences to broaden the base and lower tax rates.
Simplicity: Tax reform should achieve simplification by eliminating or reducing many tax expenditures and eliminating the alternative minimum tax (AMT). Simplifying the tax code would reduce much of the complexity for Americans to comply with the tax laws.
Revenue Neutrality: Tax reform should be revenue neutral and not an occasion to raise taxes on Americans or U.S. businesses.
Permanence: The tax code needs certainty. Individuals and businesses need to be able to rely on provisions in the tax law as part of personal and business planning. The lack of certainty in our tax laws hinders job creation at a time when unemployment is unacceptably high.
Competitiveness: Tax reform should reduce the high U.S. corporate tax rate and also achieve neutrality through a competitive international tax system, thereby placing worldwide American companies on an equal footing to their foreign competitors when conducting business in a foreign country.
Lowering the individual and corporate tax rates to a maximum of 25 percent and eliminating the second level of taxation of C corporation profits will allow all U.S. businesses, regardless of organizational form, to be more competitive and enjoy the benefits of a simpler tax system.
Savings and Investment: Many aspects of the U.S. income tax system discourage savings and investment by individuals, thereby hindering long-term growth. Tax reform should result in a tax system that is more favorable to savings and investment than our current tax system.
For a more comprehensive look at Senator Hatch’s tax reform principles click HERE.