Today is tax day, the deadline for filing your income tax returns with the IRS. It is a good time to revisit the question: how much are we taxing and spending, and where should we go from here? If Congress does nothing, the tax cuts for all Americans that were enacted in 2001 and 2003 will expire at the end of the year; triggering the largest tax increase in American history. On January 1, 2013, rates across all tax brackets would rise and our fragile economic recovery would be further crippled. This would be a disaster; we must not allow it to happen. We are not running trillion dollar deficits because our tax rates are not high enough; it is because we are spending way too much. In each of the past 4 fiscal years, we have had deficits of over 1 trillion dollars and spending is at its highest level since World War II. This simply cannot continue.
Cutting spending is critical, but it is an incomplete solution without tax reform. Our tax code is a mess; we need to move towards lower rates, fewer loopholes, and a broader base. Current high tax rates lead special interests to seek exemptions and carve outs that allow them to pay less. Meanwhile, Americans are stuck spending far too much time figuring out how to pay their taxes.
The current tax system distorts the economy and is a drag on economic growth. The Tax Foundation estimates that American families and businesses spend seven billion hours per year complying with filing requirements. Paying taxes should be simple and easy to understand, not complicated and time consuming. Simplifying the tax code will allow us to lower rates on all American workers, families, and businesses. This will enable people to keep more of their hard earned money, which they can then spend, save, or invest in the private economy.
To ensure that the freedoms and liberties we enjoy as Americans are preserved for future generations, Congress must reign in government spending and reform the tax code.
Stay in touch and God bless,