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(4) Investors and businesses make decisions on 
a forward-looking basis. They know that today’s 
large debt levels are simply tomorrow’s tax hikes, in-
terest rate increases, or inflation – and they act ac-
cordingly. It is this debt overhang, and the uncer-
tainty it generates, that is weighing on U.S. growth, 
investment, and job creation. 
(5) Economists have found that the key to 
jump-starting U.S. economic growth and job cre-
ation is tangible action to rein in the growth of Gov-
ernment spending with the aim of getting debt 
under control. 
(6) Stanford economist John Taylor has con-
cluded that reducing Government spending now 
would ‘‘reduce the threats of higher taxes, higher in-
terest rates and a fiscal crisis’’, and would therefore 
provide an immediate stimulus to the economy. 
(7) Federal Reserve Chairman Ben Bernanke 
has stated that putting in place a credible plan to 
reduce future deficits ‘‘would not only enhance eco-
nomic performance in the long run, but could also 
yield near-term benefits by leading to lower long- 
term interest rates and increased consumer and 
business confidence.’’ 
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(8) Lowering spending would boost market con-
fidence and lessen uncertainty, leading to a spark in 
economic expansion, job creation, and higher wages 
and income. 
(b) POLICY ON ECONOMIC GROWTH AND JOB CRE-
ATION.—It is the policy of this resolution to promote fast-
er economic growth and job creation. By putting the budg-
et on a sustainable path, this resolution ends the debt- 
fueled uncertainty holding back job creators. Reforms to 
the tax code put American businesses and workers in a 
better position to compete and thrive in the 21st century 
global economy. This resolution targets the regulatory red 
tape and cronyism that stack the deck in favor of special 
interests. All of the reforms in this resolution serve as 
means to the larger end of growing the economy and ex-
panding opportunity for all Americans. 
SEC. 702. POLICY STATEMENT ON TAX REFORM. 
(a) FINDINGS.—The House finds the following: 
(1) A world-class tax system should be simple, 
fair, and promote (rather than impede) economic 
growth. The U.S. tax code fails on all three counts 
– it is notoriously complex, patently unfair, and 
highly inefficient. The tax code’s complexity distorts 
decisions to work, save, and invest, which leads to 
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slower economic growth, lower wages, and less job 
creation. 
(2) Since 2001 alone, there have been more 
than 3,250 changes to the code. Many of the major 
changes over the years have involved carving out 
special preferences, exclusions, or deductions for var-
ious activities or groups. These loopholes add up to 
more than $1 trillion per year and make the code 
unfair, inefficient, and very complex. 
(3) These tax preferences are disproportionately 
used by upper-income individuals. For instance, the 
top 1 percent of taxpayers reap about 3 times as 
much benefit from special tax credits and deductions 
(excluding refundable credits) than the middle class 
and 13 times as much benefit than the lowest in-
come quintile. 
(4) The large amount of tax preferences that 
pervade the code end up narrowing the tax base by 
as much as 50 percent. A narrow tax base, in turn, 
requires much higher tax rates to raise a given 
amount of revenue. 
(5) The National Taxpayer Advocate reports 
that taxpayers spent 6.1 billion hours in 2012 com-
plying with tax requirements. 
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(6) Standard economic theory shows that high 
marginal tax rates dampen the incentives to work, 
save, and invest, which reduces economic output and 
job creation. Lower economic output, in turn, mutes 
the intended revenue gain from higher marginal tax 
rates. 
(7) Roughly half of U.S. active business income 
and half of private sector employment are derived 
from business entities (such as partnerships, S cor-
porations, and sole proprietorships) that are taxed 
on a ‘‘pass-through’’ basis, meaning the income 
flows through to the tax returns of the individual 
owners and is taxed at the individual rate structure 
rather than at the corporate rate. Small businesses 
in particular tend to choose this form for Federal 
tax purposes, and the top Federal rate on such small 
business income reaches 44.6 percent. For these rea-
sons, sound economic policy requires lowering mar-
ginal rates on these pass-through entities. 
(8) The U.S. corporate income tax rate (includ-
ing Federal, State, and local taxes) sums to just 
over 39 percent, the highest rate in the industri-
alized world. The total Federal marginal tax rate on 
corporate income now reaches 55 percent, when in-
cluding the shareholder-level tax on dividends and 
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capital gains. Tax rates this high suppress wages 
and discourage investment and job creation, distort 
business activity, and put American businesses at a 
competitive disadvantage with foreign competitors. 
(9) By deterring potential investment, the U.S. 
corporate tax restrains economic growth and job cre-
ation. The U.S. tax rate differential with other coun-
tries also fosters a variety of complicated multi-
national corporate behaviors intended to avoid the 
tax, which have the effect of moving the tax base 
offshore, destroying American jobs, and decreasing 
corporate revenue. 
(10) The ‘‘worldwide’’ structure of U.S. inter-
national taxation essentially taxes earnings of U.S. 
firms twice, putting them at a significant competi-
tive disadvantage with competitors with more com-
petitive international tax systems. 
(11) Reforming the U.S. tax code to a more 
competitive international system would boost the 
competitiveness of U.S. companies operating abroad 
and it would also greatly reduce tax avoidance. 
(12) The tax code imposes costs on American 
workers through lower wages, on consumers in high-
er prices, and on investors in diminished returns. 
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(13) Revenues have averaged 18 percent of the 
economy throughout modern American history. Rev-
enues rise above this level under current law to 19.1 
percent of the economy, and – if the spending re-
straints in this budget are enacted – this level is suf-
ficient to fund Government operations over time. 
(14) Attempting to raise revenue through tax 
increases to meet out-of-control spending would sink 
the economy. 
(15) Closing tax loopholes to fund spending 
does not constitute fundamental tax reform. 
(16) The goal of tax reform should be to curb 
or eliminate loopholes and use those savings to lower 
tax rates across the board – not to fund more waste-
ful Government spending. Tax reform should be rev-
enue-neutral and should not be an excuse to raise 
taxes on the American people. 
(b) POLICY ON TAX REFORM.—It is the policy of this 
resolution that Congress should enact legislation during 
fiscal year 2014 that provides for a comprehensive reform 
of the U.S. tax code to promote economic growth, create 
American jobs, increase wages, and benefit American con-
sumers, investors, and workers through revenue-neutral 
fundamental tax reform, which should be reported by the 
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Committee on Ways and Means to the House not later 
than December 31, 2013, that— 
(1) simplifies the tax code to make it fairer to 
American families and businesses and reduces the 
amount of time and resources necessary to comply 
with tax laws; 
(2) substantially lowers tax rates for individ-
uals, with a goal of achieving a top individual rate 
of 25 percent and consolidating the current seven in-
dividual income tax brackets into two brackets with 
a first bracket of 10 percent; 
(3) repeals the Alternative Minimum Tax; 
(4) reduces the corporate tax rate to 25 per-
cent; and 
(5) transitions the tax code to a more competi-
tive system of international taxation. 
SEC. 703. POLICY STATEMENT ON MEDICARE. 
(a) FINDINGS.—The House finds the following: 
(1) More than 50 million Americans depend on 
Medicare for their health security. 
(2) The Medicare Trustees Report has repeat-
edly recommended that Medicare’s long-term finan-
cial challenges be addressed soon. Each year without 
reform, the financial condition of Medicare becomes 
more precarious and the threat to those in or near 
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retirement becomes more pronounced. According to 
the Congressional Budget Office— 
(A) the Hospital Insurance Trust Fund 
will be exhausted in 2023 and unable to pay 
scheduled benefits; and 
(B) Medicare spending is growing faster 
than the economy and Medicare outlays are 
currently rising at a rate of 6.2 percent per 
year, and under the Congressional Budget Of-
fice’s alternative fiscal scenario, direct spending 
on Medicare is projected to exceed 7 percent of 
GDP by 2040 and reach 13 percent of GDP by 
2085. 
(3) The President’s health care law created a 
new Federal agency called the Independent Payment 
Advisory Board (‘‘IPAB’’) empowered with unilat-
eral authority to cut Medicare spending. As a result 
of that law— 
(A) IPAB will be tasked with keeping the 
Medicare per capita growth below a Medicare 
per capita target growth rate. Prior to 2018, 
the target growth rate is based on the five-year 
average of overall inflation and medical infla-
tion. Beginning in 2018, the target growth rate 
will be the five-year average increase in the 
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nominal Gross Domestic Product (GDP) plus 
one percentage point; 
(B) the fifteen unelected, unaccountable 
bureaucrats of IPAB will make decisions that 
will reduce seniors access to care; 
(C) the nonpartisan Office of the Medicare 
Chief Actuary estimates that the provider cuts 
already contained in the Affordable Care Act 
will force 15 percent of hospitals, skilled nurs-
ing facilities, and home health agencies to close 
in 2019; and 
(D) additional cuts from the IPAB board 
will force even more health care providers to 
close their doors, and the Board should be re-
pealed. 
(4) Failing to address this problem will leave 
millions of American seniors without adequate health 
security and younger generations burdened with 
enormous debt to pay for spending levels that cannot 
be sustained. 
(b) POLICY ON MEDICARE REFORM.—It is the policy 
of this resolution to protect those in or near retirement 
from any disruptions to their Medicare benefits and offer 
future beneficiaries the same health care options available 
to Members of Congress. 
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(c) ASSUMPTIONS.—This resolution assumes reform 
of the Medicare program such that: 
(1) Current Medicare benefits are preserved for 
those in or near retirement. 
(2) For future generations, when they reach eli-
gibility, Medicare is reformed to provide a premium 
support payment and a selection of guaranteed 
health coverage options from which recipients can 
choose a plan that best suits their needs. 
(3) Medicare will maintain traditional fee-for- 
service as an option. 
(4) Medicare will provide additional assistance 
for lower-income beneficiaries and those with greater 
health risks. 
(5) Medicare spending is put on a sustainable 
path and the Medicare program becomes solvent 
over the long-term. 
SEC. 704. POLICY STATEMENT ON SOCIAL SECURITY. 
(a) FINDINGS.—The House finds the following: 
(1) More than 55 million retirees, individuals 
with disabilities, and survivors depend on Social Se-
curity. Since enactment, Social Security has served 
as a vital leg on the ‘‘three-legged stool’’ of retire-
ment security, which includes employer provided 
pensions as well as personal savings. 
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