Monday, April 20, 2015

Time to Fix the Broken Tax Code

by Rep. French Hill (AR-2): This past week, as they struggled to meet the Tax Day deadline to submit their taxes, millions of hardworking Americans were reminded of the burden of the United States' madly complex federal tax code. This, combined with the public's lack of faith and distrust in the Internal Revenue Service, served as a stark reminder that our tax system is broken and that the need for relief from its maze is now.

At over 70,000 pages, the federal tax code is simply unnavigable. Estimates from the National Taxpayers Advocate show that, this year alone, Americans will spend more than six billion hours seeking to comply with the tax code.

A recent report from the National Taxpayers Union found that 94 percent of returns are filed with some kind of assistance, whether paid preparers or automatic software, and compliance costs are estimated at almost $234 billion. Obamacare's new taxes and added regulatory burdens only compound the tax-compliance nightmare, especially for our job-creating small businesses.

When you add together the burden of compliance on small businesses and families, the fact that the United States has the highest corporate tax rate in the world, and has one of the highest tax rates on long-term investment, the imperative of tax reform is clear: it is no longer an aspiration--it is a necessity for our successful economic policy.

There is universal agreement that we must reform our tax system. The last successful attempt was in 1986, and, since then, the complexity of the code has increased greatly. Past Congresses and presidents have been unable to summon the political resolve to find a long-term solution to our tax-code crisis.

One of my main priorities in Congress is working toward a tax code that is simpler, fairer, and flatter that promotes job creation, economic growth, and competition.

The first bill I co-sponsored was HR27, the Tax Code Termination Act, which was introduced by Rep. Bob Goodlatte of Virginia; the bill would abolish our current tax code altogether and compel Congress to work together to put forth a new, more efficient, user-friendly system that not only funds our government, but also is fairer to the taxpayer and promotes long-term investment and growth.

Recently, the House has made strides toward the goal of comprehensive tax reform by passing bills that would permanently extend certain tax credits that encourage charitable giving and make it easier for small businesses to operate, invest and grow.

We have also passed a balanced budget that provides for comprehensive tax reform, and most recently, passed a bill to repeal the onerous death tax and a series of reforms to make the IRS more transparent and accountable to the American people. While these strides are important, they are not a substitute for the real solution--pressing the reset button and overhauling our broken tax code.

Numerous tax-reform proposals, including the consumption-based fair tax and variety of flat-tax proposals, have been circulating around the Capitol, and the House Ways and Means Committee, under Chairman Paul Ryan, is working to create a simpler and fairer system that creates jobs and opportunities in our economy.

With the recent overwhelming bipartisan success in repealing Medicare's flawed sustainable growth rate to reform and preserve Medicare, I am optimistic that we can work together to overhaul our broken tax code.

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