Simple is Best Prescription for Tax Reform

Statement

By Senate Dan Coats

Let's admit it: The NFL gave Indianapolis a better stimulus package in one week than the president has in three years. The city hosted its first Super Bowl this month, and the associated festivities and tourism provided the region a welcome boost.

Big-time sporting events have treated Indy well: The city has hosted the Final Four six times and is known throughout the world as home to the greatest spectacle in racing. Estimates have forecasted that the Super Bowl game alone will have brought as much as $300 million to $400 million to Indianapolis and the surrounding counties.

Our businesses require more than one-week fixes, however, and only Congress and the White House can put in place the sort of long-term solutions that grow the economy beyond the hash marks.

Now imagine if the nation's most contentious sport, Washington lawmaking, could boost local economies for longer than a weekend at a time.

The president and congressional leaders could do that by simplifying our outdated and complex tax code. Through comprehensive tax reform, individuals, families and businesses would receive the economic relief needed to plan, invest and provide for a better future.

Unfortunately, Congress and the White House have spent their time quibbling around the margins of targeted tax breaks here and populist tax hikes there instead of seeking a long-term solution that would produce real results for Americans. It's time we take a page out of President Reagan's 1986 playbook. More than 25 years ago, Reagan passed a bold and comprehensive overhaul of the tax code by working with both Republicans and Democrats. As a result of this bipartisan legislation, more than 6.3 million new jobs were created in two years.

Over time, Congress has managed to complicate Reagan's simplified tax system by adding thousands of loopholes, deductions and credits that benefit only a few. These special preferences cause Americans to spend 6 billion hours and more than $160 billion every year to comply with the code. By cleaning up this tangled web, we could lower rates for families and businesses while saving time and money on compliance.

The current tax code also puts our country at a competitive disadvantage. At 35 percent, the United States has one of the highest corporate tax rates, second only to Japan among our trading partners. By reforming the tax system and lowering the corporate rate, American businesses would be able to compete internationally and invest more here at home.

I have introduced legislation with Oregon Sen. Ron Wyden, the Bipartisan Tax Fairness and Simplification Act, which would shrink the tax code, keep rates low, and help expand our economy. This plan would allow taxpayers to keep more of their money, and put our companies in a stronger position to compete with countries like China and India.

My proposal helps address the nation's debt and jobs crises. Simpler, fairer and more competitive tax rates would empower job creators to grow and hire. When more Americans are working, more people are paying taxes; and when more taxes are being paid, more debt can be wiped off our books. The Heritage Foundation estimated that our approach would reduce the deficit by $61 billion and generate more than 2 million jobs a year.

From the recent State of the Union address to the presidential campaign trail, Americans have heard a lot about the need for tax reform. While it is encouraging that leaders and lawmakers across the partisan divide finally agree that comprehensive tax reform is necessary, each side remains stuck in a huddle. So in the Super Bowl spirit, it is time for the president to get off the sidelines and lead on this critical issue in a bipartisan way. It's time to move the ball down the field.

Coats is a Republican U.S. senator from Indiana.

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