
Every year Americans spend more than six billion hours and $168 billion to file their returns
There have been so many changes to the tax code over the past decade that it is now 10 times the size of the Bible, but with none of the Good News. That factual statement usually gets a good laugh back home in Michigan. What isn't funny is the effect that constant tinkering with taxes has had on the people who pay them, and on the economy.
According to
Nina Olsen,
the National Taxpayer Advocate at the IRS, Americans overall
spend over six billion hours and $168 billion every year to file their
returns. This is stark testimony to the complexity of the tax code.
Meanwhile, owners of small businesses face tax rates as high as 44.6%,
while the total (state and federal) U.S. corporate rate, 39.1%, is the
highest in the industrialized world.
The last time the U.S. enacted a
comprehensive tax reform was 1986. But many of America's major
competitors have been actively reforming their tax laws in recent years.
Even our closest neighbors are getting ahead of us. Canada has already
reformed its tax laws and Mexico is doing so right now. If Congress
doesn't take action, the U.S. risks falling further behind.
The
tax code should make it easier for American companies to bring back
profits earned overseas so they can be invested here. It should not
hinder small businesses from growing into large businesses. And the
individual income tax needs to be simpler, fairer and flatter for
everyone.
On Wednesday, I am releasing what a simpler,
fairer tax code actually looks like. The guiding principle is that
everyone should play by the same rules—your tax rate should be
determined by what's fair, not by who you know in Washington. Here is
what it would look like:
First, the tax
code will be made simpler—so every family can do its own taxes
confidently, without fearing an audit, or wondering if someone else who
can afford an expensive accountant is getting a better deal.
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