How the GOP can keep tax reform 'on track'

• The effort to reform the tax code took an important stride forward Wednesday with the release of a unified framework by key White House and Congressional leaders.
• While much work remains to be done, we believe Congress is well-positioned to move forward with comprehensive, pro-growth tax reform.
• To keep the process on track, lawmakers must now pass a budget resolution with a mechanism that allows tax reform to be passed without the threat of a filibuster.

Melina Mara | The Washington Post | Getty Images

Senate Majority Leader Mitch McConnell

In the 31 years since Congress last achieved the monumental feat of tax reform, our complex and antiquated code has become a millstone around the neck of our economy, dragging down American job creation and wage growth. A major overhaul of the system is needed to spur economic growth and put money back in the pockets of middle class families and Main Street job creators. This Congress has a once-in-a-generation opportunity to do just that.

The effort to reform the tax code took an important stride forward Wednesday with the release of a unified framework by key White House and Congressional leaders. This is the culmination of months of negotiations and years of work by the tax-writing committees in the House and Senate. While we've said all along that not everyone is going to like every element—the business community included—this is the clearest indicator yet that tax reform is moving forward with determination.

We're now entering a new phase in which tax reform will move from the discussion table to the halls of Congress. Thursday the Chamber hosted one of the principal players in the debate, House Ways and Means Committee Chairman Kevin Brady (R-TX), who briefed our members on his thinking about the next steps for tax reform. His committee, along with the Senate Finance Committee, will use the framework as a guide as they draft and then mark-up tax reform legislation in the coming weeks.

The Chamber has long been clear about what pro-growth tax reform should achieve. It should lower rates for all businesses, including the many small businesses that file their taxes as pass-thru entities. It should simplify rules to limit compliance costs, increase certainty so that businesses can plan for the future, and move as far as possible toward allowing all businesses to expense capital purchases. It should create an internationally competitive system that eliminates the double taxation companies now face when they earn profits abroad. Altogether, these reforms would free our economy to grow more rapidly.

We shared our priorities for reform with key negotiators early in the process. And I reiterated them in a recent meeting with House Speaker Ryan and his team. The Chamber also held over 200 meetings and events with lawmakers, businesses, and local chambers to build support for tax reform across the country during the August recess; mobilized small businesses to storm Capitol Hill and advocate for tax reform during our recent National Small Business Summit; and launched an ongoing paid media campaign highlighting the urgent need for reform in key states and districts.

While much work remains to be done, we believe Congress is well-positioned to move forward with comprehensive, pro-growth tax reform. To keep the process on track, lawmakers must now pass a budget resolution with a mechanism that allows tax reform to be passed without the threat of a filibuster, which would require a super-majority of 60 votes to overcome. A budget resolution is essential if the promise of tax reform is to become a reality. The Chamber organized a letter signed by more than 230 trade associations and local business organizations urging quick action on this priority.

The budget resolution to clear the path for tax reform could be a tough fight—and if it is, it will be the first of many in the coming months. Just because tax reform is now possible—and even likely—doesn't mean it will be easy.

Remember what it took to reform the tax code in 1986. It took the herculean efforts of political heavyweights President Ronald Reagan, House Speaker Tip O'Neill, and Treasury Secretary James Baker—and the legislation still collapsed repeatedly before final passage. It also took the willingness of the business community to stand up and stick its neck out to support a package that wasn't perfect, but was a hell of a lot better than the alternative.

Lawmakers and business leaders alike must be just as committed to pro-growth reform this time. So my message to those who want to have a voice and play a role in the tax reform debate is simple: get on the train now. And if you're tempted to jump off when the going gets tough—and it will—do so at your own peril. If you don't stay on the train, you'll wind up on the tracks.

Commentary by Thomas J. Donohue, who has been the president and CEO of the U.S. Chamber of Commerce since 1997. Before that, he was president and CEO of the American Trucking Associations for 13 years.

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