Ways and Means Chairman Kevin Brady: 'We've got the fundamentals right in this tax reform bill'

Key Points
  • House Ways and Means Committee chairman Kevin Brady tells CNBC the tax bill encourages companies to re-invest in America.
  • Brady says the bill's fundamentals are right, despite critics arguing the overhaul will shift the tax burden to individuals.
  • Economic growth will be a big factor in determining the bill's success.
Rep. Kevin Brady: Tax bill redesigned to bring earnings back to US

House Ways and Means Committee Chairman Kevin Brady told CNBC on Thursday the tax bill encourages companies to re-invest in America and gives American companies an upper hand in the global market.

"We set out to create a tax code built for growth, jobs, paychecks and the economy, and we want to leapfrog America back into that lead pack globally," Brady said on CNBC's "Squawk Box."

The Texas Republican off the vote Wednesday to President Donald Trump for his signature.

The plan slashes tax rates permanently for businesses and temporarily for individuals.

"We redesigned this so companies can compete and win and bring those earnings back to re-invest in America," Brady "I know we've got the fundamentals right in this tax reform bill."

Critics argue the bill will disproportionately burden individuals, whose tax cuts for households and families were designed to expire after 2025. The general public seems to agree. Recent polls show public support hovering around 25 percent. Only about 14 percent of Americans believe they'll actually get a tax cut, and 35 percent expect the bill will substantially increase the budget deficit.

But Brady insists pollsters are simply asking the wrong questions.

"If you ask people what do you think of Trump – what do you think of the tax reform bill? It's only what they've heard," he said. "When you ask them, 'Do you want the standard deduction double so fewer people have to itemize to get their tax cut? Do you want lower tax rates on you and your family'...the answers are overwhelmingly 'yes' to that."

The GOP insists tax cuts within the bill, amounting to about $1.4 trillion, will prompt companies to re-invest the savings into their workforce, community and infrastructure.

Hours after Congress passed the tax bill, Boeing, AT&T, Fifth Third Bancorp and Wells Fargo announced plans to share the savings, promising infrastructure investment and offering wage hikes and bonuses to workers.

Republicans in Congress likely find those initial results promising, but as far as metrics for success of the bill, Brady said they are thinking in broader strokes. Down the line, he said Congress will have to assess job creation, paycheck movement and business investment, which he called the "missing ingredient in this economy."

Much of the bill's perceived success, however, will bank on economic growth.

"Every economist seems to be stuck in this slow-growth, 2 percent mode for the next decade," Brady said. "That's what we're trying to shake up, not just quarter to quarter."