The U.S. tax code is complicated, unfair and punitive. And that’s putting it mildly.
Consider these numbers:
• 74,000 — the number of pages in the tax code — five times as long as the Bible’s Old and New Testaments combined.
• 6.1 billion — the number of hours Americans spend trying to comply with the tax code.
• $168 billion — the annual cost of compliance to individuals and businesses.
The tax code punishes everyone from families trying to make ends meet to employers trying to compete in the global marketplace. Instead of promoting economic growth and enhancing our international competitiveness, it does just the opposite.
That’s why it is well past time for Congress and the president to put aside the posturing and get serious about passing a major tax reform package.
The guiding principle of this effort must be tax simplification. Nearly 90 percent of taxpayers either hire a professional or buy commercial software to spare them the agony of figuring out what they owe the government. That’s not surprising when you consider that in the last decade there have been more than 4,000 changes to the tax code — more than one a day. Imagine if all this time, money, and energy were put into job creation and getting Americans back to work.
Even the Internal Revenue Service (IRS), the agency charged with enforcing the tax code, is failing to keep up with the code’s complexity. According to a report by the National Taxpayer Advocate, the IRS accumulated a backlog of more than 1 million pieces of taxpayer correspondence in 2012 alone.
As Florida’s only member of the tax-writing House Ways and Means Committee, I understand that any meaningful tax reform cannot be accomplished behind closed doors. Over the last two years, our committee has held 30 public hearings and roundtables with those who administer the tax code and all groups that are affected by it. From these discussions, the common refrain is that America needs a simpler, fairer, pro-growth tax code to help revitalize a sluggish economy.
That means lowering corporate tax rates — currently the highest in the world — to encourage businesses to grow jobs at home and not watch them disappear overseas.
That means not taxing small business on Main Street at a higher rate than big business on Wall Street.
And that means reducing individual rates for all Americans to be paid for by stripping oil companies and other special interests of tax subsidies.
In walking Main Street and visiting with countless families and small business owners, I’ve witnessed firsthand the devastation a broken tax code can inflict. In the coming months, the Congress has not only an opportunity but a responsibility to help ease this burden. It’s going to take both parties working together to get the job done for the American people.
The New York Times editorialized that “tax reform, done right, could be a cure for much of what ails the economy.”
The time for talk is over. The time to act is now.
Republican Vern Buchanan represents Florida’s 16th District in Congress. He is a member of the House Ways & Means Committee.