It is mid-April, which means the Huskers’ spring game has been played, warmer weather should be upon us soon, baseball has resumed and of course – tax season.
Every year, American families and businesses work to compile all the necessary documents, receipts and records to file their taxes before the April 15 deadline. Anyone who has filed their taxes knows this is no easy task. The complexity of the current tax code makes it very difficult for the average citizen to file their taxes without assistance.
Everyone from the individual taxpayer to multinational corporations struggles with our inconsistent and complicated tax code, which is comprised of more than 10,000 pages of ever-changing laws and regulations. In the last decade alone, there have been more than 4,400 changes to federal tax policy – more than one per day.
It is no wonder nearly 90 percent of Americans pay someone else to do their taxes or use commercial software to file their taxes. It costs Americans more than $160 billion and 6 billion work hours a year trying to comply with the tax code. Reducing this burden on taxpayers would leave more time and resources in the private sector where it can be more effectively used to grow our economy.
To simplify America’s broken tax code, which will make compliance easier for families and small businesses, we need comprehensive tax reform. This process will not be easy. It is no coincidence it has been more than 25 years since Congress and the president last enacted an overhaul of the tax system.
While only 9 percent of Americans believe our tax code is the best in the world, according to a Rasmussen poll released last week, it is much more difficult to find agreement on what specific provisions of the tax code should be preserved and which should be eliminated. What one person identifies as a “loophole,” others will defend as a critical deduction or credit.
In travelling the Third District, I have discussed this issue with numerous individuals, farmers, ranchers and small business owners, and I have hosted several tax reform roundtables. While there is still work to be done, individuals and organizations have actually told me they would be willing to give up a specific deduction in exchange for a reduced overall tax rate and simplification of the code.
Last week, President Obama in his budget included a proposal for revenue neutral corporate tax reform. While I am pleased he is interested in working to improve our tax code, we must also reform the code for individuals, families and the millions of small businesses which file as individuals or operate on a passthrough basis.
Recognizing it will require support from both parties, the House Committee on Ways and Means, of which I am a member, is leading the charge to enact comprehensive tax reform in an open and bipartisan process. The committee has established 11 bipartisan working groups to review specific areas of current law. I am leading the Financial Services Working group along with Congressman John Larson (D-CT), and I look forward to reporting our findings early next month.
This process is not only a welcome departure from the way legislative proposals have developed in the past, it provides the best chance for tax reform to be passed into law. Simplifying the tax code could bring enormous benefits to our economy, and if we are successful, maybe mid-April won’t be as much of a burden for taxpayers in the future.