The crusade for tax reform, free trade, a sound dollar, and ObamaCare repeal got a big lift on Wednesday when the House leadership chose Kevin Brady of Texas as the new chair of the powerful House Ways and Means Committee. He’s a perfect replacement for now-Speaker Paul Ryan. With Ryan running the show in the House and Brady running the tax committee, the table is well set for seismic reforms in 2017 – if we get a pro-growth president.
Expect Brady to follow in Paul Ryan’s footsteps and get some version of a flat tax or consumption tax through the House. “I see this [tax reform] as the number one competitiveness issue facing the country,” he tells me. “Our defective tax code is a major reason the U.S. isn’t growing faster.” I asked him whether a flat tax or a consumption tax would be his ideal. “I’ve always intuitively liked the consumption tax model,” he replies. Pay when you spend. Whether he can actually do away with the income tax is a high political hurdle to clear, but he clearly wants to nudge the system in that direction.
Mr. Brady is an unflinching free trader at a time when Donald Trump may be swaying the party toward tariffs and walls. He also wants to tackle the entitlements and repeal the most odious parts of ObamaCare. He’s with Larry Kudlow on the theme of “sound money and a strong dollar.” He also helped produce some of the seminal economic studies out of Congress on Barack Obama’s miserable economic performance, showing that the economy is at least $2 trillion behind in GDP growth where we would normally be in the recovery of a recession.
Brady is a pro-growth crusader and his appointment is another sign that the stars may be finally getting aligned for tax reform in Washington.