Skip to main content

Rep. Roger Williams on Tax Reform

April 13, 2016

The House Ways and Means Committee is holding hearings on tax reform in advance of major restructuring next year should a Republican win the White House.

Today, Rep. Roger Williams presents his plan to the committee. The congressman’s Jumpstart America legislation is a good plan, but I would make it better in these ways:

• Individual Income Tax Rates. Williams would reduce the current seven tax rates (10, 15, 25, 28, 33, 35, and 39.6 percent) to four (10, 15, 20, and 30). I would go to two rates (10 and 25), as envisioned in a previous Paul Ryan tax plan.
• Individual Savings. Williams would cut the top tax rates on dividends and capital gains from 23.8 to 15 percent. That’s great, but I would add Universal Savings Accounts to any tax overhaul, as I’ve proposed and Sen. Flake and Rep. Brat have introduced.
• Corporate Income Tax Rates. Williams would cut the federal corporate rate from 35 to 20 percent. I would slash it further to Donald Trump’s proposed 15 percent.
• Corporate Foreign Earnings. Williams would reduce taxes on repatriated foreign earnings. I would scrap worldwide taxation of corporations and go to a territorial system, allowing tax-free repatriation.
• Estate Tax. Williams would eliminate the estate or death tax. I agree.
• Depreciation. Williams would scrap the business depreciation system and go to expensing, or immediate write-off, of capital investments. I agree.
• Payroll Taxes. Williams would cut the federal payroll tax rate by 2 percentage points. Instead, I would allow workers to redirect 6 percentage points of the tax into private Social Security accounts, while cutting traditional benefits. To workers, that would feel like a large tax cut because they would gain ownership of their retirement contributions, which currently disappear from their paychecks into a government black hole.

The current tax code is a mess, and it should be overhauled. We should transition to a low-rate flat tax, and the Williams plan and my improvements would be good first steps.

So kudos to Rep. Williams for putting a specific pro-growth plan on the table. Other members of Congress should follow suit to aid the Ways and Means Committee in drafting legislation.

Americans For Tax Reform provides a useful summary of Williams’ plan. I provide an overview of tax reform options here.

Issues:Economy