Most everyone agrees that our nation's tax system is totally flawed and 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 return. 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 complicated provisions which require special paperwork and detailed record keeping.
American workers are now asked to work for 3 full months to pay for 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 an expanding federal bureaucracy while everyone else is making significant sacrifices.
The last major reform of the tax code took place over a quarter century ago in 1986 and while far from perfect, helped reduce the harm inflicted on the economy in many ways. One good guiding principle of the 1986 reform was that it must not increase the total tax burden, while lowering individual and corporate income tax rates.
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.
America's tax code has grown too complicated and cumbersome, and it has become a major barrier to economic growth. In a time of increasing global competition, the U.S. will soon have the highest corporate tax rate among the developed nations of the world.
That's why we need to make the federal income tax code as simple as possible. The House Ways and Means Committee is continuing an aggressive hearing schedule to formulate ideas this summer to make the code flatter, fairer, simpler, and more competitive.
The American people need action that will make the tax code as simple as possible and Congress should respond because the future health of the U.S. economy demands it.