America’s tax code has grown too cumbersome, and has become a major barrier to economic growth.
Nearly everyone agrees that our nation's tax system has become bloated and is in need of considerable reform. The tax code is so complex that more than 80 percent of individual taxpayers use an accountant or a computer-based program to prepare their tax returns. The IRS estimates that Americans spend 6.6 billion hours and $194 billion each year to comply with a tax code that has far too many provisions requiring special paperwork and detailed records. American workers are now asked to work for three full months just to pay their annual federal, state, and local taxes. It is totally unacceptable to require already stressed families to give up at least a quarter of their income to prop up the very federal bureaucracy that is making life more difficult for so many.
The last major reform of the tax code took place in 1986, and while far from perfect, this revamped and streamlined code helped reinvigorate the economy and led to real gains for many average Americans. That tax reform was so successful because it kept the total tax burden the same; the revenues gained by closing tax loopholes and striking exceptions were passed back to the American people via lowered individual and corporate income tax rates.
It is time to reform our outdated and complex tax code once again. America’s tax code has grown too cumbersome, and has become a major barrier to economic growth. Businesses and families need a stable and uncomplicated tax code. Businesses need to know how high their taxes will be in future years to make decisions about hiring and expanding. Families need to know how high their taxes will be before they make decisions about large expenditures. In a time of increasing global competition, the United States has the highest corporate tax rate among the developed nations of the world. Congress needs to take action to make the tax code as simple as possible for small businesses and families to succeed, and to ensure the faster growth the U.S. economy needs to finally escape the effects of the most recent recession.