A 100-day challenge for tax reform
© Greg Nash

"The people are watching and waiting. They don't demand miracles. They do expect us to act. Let us act together." That is how President Reagan, less than 30 days after his first inauguration, concluded his speech to Congress on his program for economic recovery. In that speech, Reagan outlined his tax plan. Three weeks later, he secured a commitment from Democratic and Republican congressional leaders to pass his plan by mid to late summer. And on Aug. 13, Reagan signed the Economic Recovery Tax Act into law.

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America is as desperate today for policies to grow our economy, create jobs and lift real wages as it was in 1981. Today, just as in 1981, a major culprit of our economic malaise is a flawed tax code that punishes families, harms businesses and discourages investments in the future.

America currently has the highest tax rate on businesses, small and large, in the industrialized world. While tax rates have been falling in the rest of the world, they have gone up for many American businesses.

To make matters worse, America is one of only six major economies that impose a system of worldwide taxation on its businesses. As a result, an American company pays a tax rate of up to 39 percent on the money it earns anywhere in the world. By comparison, a company based in Great Britain pays a rate of no more than 20 percent and only on the income it earns in the U.K. And the Conservative U.K. government has announced plans to lower the corporate rate to 17 percent.

When a business wants to invest in new equipment or facilities — the kind of investments that allow businesses to grow and hire more workers — the U.S. tax code often requires it to depreciate its investment over somewhere between five and 39 years. The result is less investment and less economic growth, all of which means lower wages for American workers.

Add all of this together, and the U.S. has one of the least competitive tax systems in the industrialized world. A study by the nonpartisan Tax Foundation found that, out of the 34 countries in the Organization for Economic Cooperation and Development (OECD), the U.S. ranks 32nd in terms of having a competitive tax code. We are only ahead of France and Italy, and we're behind countries like South Korea, Australia and even Slovenia.

When it comes to fixing our broken tax system, there is no shortage of policy ideas — some admittedly better than others. Last week, Speaker Paul RyanPaul Davis RyanRealClearPolitics reporter says Freedom Caucus shows how much GOP changed under Trump Juan Williams: Biden's child tax credit is a game-changer Trump clash ahead: Ron DeSantis positions himself as GOP's future in a direct-mail piece MORE (R-Wis.) and House Republicans unveiled their blueprint for reform. Last year, five bipartisan working groups in the Senate offered their thoughts on different aspects of the tax code. Before that, there were 11 different bipartisan working groups in the House. President Obama has even recommended reforms to lower the corporate tax rate.

So with all this activity, why is nothing getting done?

There are plenty of excuses and no shortage of partisan finger pointing.

But there is one tried and true way to overcome the excuses and break the gridlock: presidential leadership with deadlines.

On Reagan's 100th day in office, The New York Times wrote, "Mr. Reagan has established his goals faster, communicated a greater sense of economic urgency and come forward with more comprehensive proposals than any new President since the first 100 days of Franklin D. Roosevelt."

Reagan’s focus and urgency not only produced legislative results, but economic ones for the American people. From 1983 to 1990, real economic growth averaged 4.1 percent a year, nearly double the growth of the past six years. Robust economic growth creates jobs, and from 1983 to 1990, the economy added 19.9 million jobs.

The next president should follow Reagan's example. The next president should make tax reform and economic growth a centerpiece of his or her first address to Congress and declare a goal of enacting tax reform within the first 100 days of his or her administration. The next president will then have to work with and, perhaps at times, cajole Congress into delivering for the American people.

If the next president is successful, the reward won't just be glowing reviews in America's papers, but the kind of economic, job, and wage growth Americans deserve. 

Bradley is chief strategy officer of the Conservative Reform Network and president of Chartwell Policy Solutions. He previously worked in the senior staff for three Republican House leaders and served as executive director of the Republican Study Committee. Follow him on Twitter @NeilBradleyDC.