Tax Reform: Ryan-Brady Plan is a Better Way
Earlier this year, Speaker of the House Paul Ryan and House Ways and Means Committee Chairman Kevin Brady released a tax reform framework titled, “A Better Way: A Pro-Growth Tax Plan for All Americans.” The plan outlines House Republicans’ priorities for reforming the Internal Revenue Code. Unlike the legislation introduced by Ways and Means Chairman Dave Camp in 2014, the Ryan/Brady proposal is framed as a concept rather than a bill. Nevertheless, most components of the plan are described in sufficient detail to be analyzed and discussed.
The plan reflects a coherent approach to lowering statutory tax rates, maintaining a progressive income tax, and dramatically reducing the marginal tax rate on new investment; a reform likely to spur a substantial increase in new investment. The plan will simplify compliance with the tax code by increasing the number of filers choosing not to itemize their deductions. The individual income tax reforms approach revenue neutrality at the end of the budget window.
Relative to reforms proposed by recent Republican presidential candidates, the House Republican plan has a far more modest budgetary impact while still encouraging work and investment.