The House Ways and Means Tax Policy Subcommittee on April 13, 2016, held a hearing on Member proposals relating to fundamental reform of the income tax system, including Rep. Bob Goodlatte's (R-VA) bill to sunset the current tax code at the end of 2019 and establish a new system.

In his opening statement, Chairman Charles Boustany (R-LA) said that the Committee's efforts on tax reform require a fresh look and consideration of all ideas and proposals, including those presented at the hearing. "Ultimately, the Ways and Means Committee must weave the most pro-growth concepts and ideas into a bold plan that fundamentally and comprehensively reforms our tax system," he said.

Ranking Member Richard Neal (D-MA) used his opening statement to call for hearings on the so-called Panama Papers detailing the use of shell companies by clients of a Panamanian firm whose records were leaked. "The Panama Papers have highlighted the urgent need to crack down on those that engage in exotic tax schemes in order to evade paying their fair share," he said. "If the recent wave of inversions were not enough to spur this committee to action, perhaps the Panama Papers will."

Under Rep. Goodlatte's Tax Code Termination Act (H.R. 27), Congress would be required to approve by July 4, 2019, a new tax system that:

— Applies a low rate to all Americans
— Provides tax relief for working Americans
— Protects the rights of taxpayers and reduces tax collection abuses
— Eliminates the bias against savings and investment
— Promotes economic growth and job creation
— Does not penalize marriage or families

Rep. Roger Williams (R-TX) testified about his "Jumpstart America" legislative package that, among other things, would lower the corporate tax rate to 20%, allow for a permanent 5% tax rate on the repatriation of foreign earnings and make 100% bonus depreciation permanent.

In a second panel, Joint Committee on Taxation Chief of Staff Tom Barthold reviewed, at the request of Reps. Boustany and Neal, former Ways and Means Committee Chairman Dave Camp's (R-MI) Tax Reform Act of 2014 (H.R. 1). Chairman Boustany inquired about the complexity of the tax code, which he said the public views as mind-numbingly complicated, and said the Committee is seeking to build upon what former Chairman Camp did.

Rep. George Holding (R-NC) asked about the anti-base erosion provisions of the Camp bill and whether, given the increase in base erosion, they would still be effective today. Barthold did not comment on the question of effectiveness, but explained the Camp bill's establishment of a new category of foreign base company intangible income. He said H.R. 1 tried to put a measure on a business enterprise's intangible investment activity and tax it at a lower rate to encourage its retention in the United States and prevent it from being shifted to another country for a very low rate of tax.

The hearing followed a Members' Day hearing last month on consumption tax proposals.

Statements by Reps. Boustany and Neal are attached, along with Barthold's testimony.

Earlier, the Committee approved four bills intended to make the IRS more accountable to the American people:

— H.R. 3724, the Ensuring Integrity in the IRS Workforce Act of 2016, sponsored by Rep. Kristi Noem (R-SD)
— H.R. 4890, the IRS Bonuses Tied to Measurable Metrics Act, sponsored by Rep. Pat Meehan (R-PA)
— H.R. 4885, the IRS Oversight While Eliminating Spending Act of 2016, sponsored by Rep. Jason Smith (R-MO)
— H.R. 1206, the No Hires for the Delinquent IRS Act, sponsored by Rep. David Rouzer (R-NC).

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ATTACHMENTS

Barthold statement

Boustany statement

Neal statement