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You deserve a clear tax code |
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October 2, 2017 |
By U.S. Senator Mike Crapo
Serious work on federal tax reform is
encouraging, as the best way to strengthen
families, support small business growth and job
creation and boost our national economy is to
enact pro-growth comprehensive tax reform. The
tax code is weighing us down and in need of
comprehensive reform to lower the burden on all
Americans and make the tax code fairer, flatter
and simpler.
We would be hard pressed to create a tax code
that is more complex, more costly to comply
with, unfair and anti-competitive for American
businesses than what we have right now:
Complexity — The Taxpayer Advocate Service (TAS),
an independent office within the Internal
Revenue Service (IRS) with the job of working to
ensure that taxpayers know their rights, is
required to submit a report to Congress annually
that identifies the most serious problems
encountered by taxpayers. In its 2016 report,
TAS called on Congress to vastly simplify the
tax code, finding that, “Congress has made more
than 5,900 changes to the code — an average of
more than one a day — just since 2001. The
compliance burdens the tax code imposes on
taxpayers and the IRS alike are overwhelming.”
Compliance Difficulty — The complexity is costing
Americans considerable time and money in
addition to their tax burden just to try to
ensure that they file correctly. TAS reported
that taxpayers and businesses spend about six
billion hours a year complying with tax-filing
requirements. TAS found that the complexity of
the tax code is causing more than half of
individual taxpayers to pay professionals to
prepare their returns, and 40 percent of
taxpayers use tax software.
Unfair and Anti-competitive — While virtually
every other developed country has modernized its
corporate tax code in the last 20 years in order
to make their businesses more competitive in the
international marketplace, the U.S. has stood
back and allowed its corporate tax rate to
become the highest rate in the industrialized
world. Growing evidence shows this should not be
considered just a problem for big corporations.
Economic research and modeling, including by the
nonpartisan Congressional Budget Office (CBO)
and Joint Committee on Taxation, has begun to
conclude that a much greater share than
previously thought of the burden of high
corporate tax rates is borne not by the
companies and their shareholders, but by the
American workers in those companies, who face
lower wages and fewer job opportunities as a
result of higher corporate taxes. The CBO has
cited analysis showing that workers carry as
much as 70 percent of the burden of the
corporate income tax.
To do tax reform right, we must go beyond the
simple traditional tax cut debate and instead
comprehensively address each one of these
problems within the tax code.
For years, I have worked, through my committee
assignments, the Bowles Simpson Commission and
the Gang of Six, to craft solutions for
comprehensive tax reform. While lowering rates
is important, it must not be the sole focus for
Congress in its tax reform deliberations, and
must not be the sole measure taxpayers use for
evaluating what tax reform means for them.
We must address each one of these problems with
the current tax code and present to the American
taxpayer a reformed code with an emphasis on
lower rates, broadening the base, reducing
complexity and eliminating anti-competitive
provisions.
I will continue to press for these objectives as
tax reform is debated in Congress. Tax policy
should not be so complex that it requires such
strain and expense on Americans.
This is your money, and you deserve to have a
clear tax code that respects that. |
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