Whew! Another Tax Day has come and gone. Even though Americans had three extra days to finish their taxes, that added time didn’t do much to alleviate the stress of filling out taxes. Even when you are expected to get money back from the government, it seems like the entire process is a continuous series of hurdles that people are being forced to jump over in order to get their own money back. And, as this tax day gets further behind us, the need for tax reform continues to grow and people from all walks of life and political persuasions agree that tax reform is critical.
The numbers don’t lie:
- The tax code is 74,000 pages long and IRS tax statutes and regulations contain 4 million words. To put that in perspective, “War and Peace” has 587,000 words.
- A Pew Research Center poll in March 2015 found that 59 percent of Americans agree that “there is so much wrong with the federal tax system that Congress should completely change it.”
- Even going back to a poll from The Tax Foundation in April 2005, it found that 77 percent of Americans thought there should be a complete overhaul or major changes made to the federal tax system.
The desire for tax reform makes far more sense when you take into account that the last time Congress and the White House did comprehensive tax reform was in 1986, 30 years ago.
What made Tax Day 2016 different from most is that it came in the middle of a presidential election. And to find out what people thought about tax reform, the Taxpayers Protection Alliance went out on the streets of Washington to talk to everyday Americans about our tax code and find out if they knew what the candidates for president are saying about the issue of tax reform. The results were interesting and prove that taxpayers do want tax reform. Many of the folks didn’t know the specifics of the candidates’ plans. That lack of knowledge is mainly because the candidates have been taking personal shots at one another rather than talking about fixing the broken tax system.
Ultimately, accomplishing tax reform is the responsibility of Congress. Lawmakers know exactly what the problems are, they are just afraid to take the next step to fix the tax code.
The fixes aren’t difficult. First, the overall tax code must be simplified so that individuals and families are able to spend less time and money on compliance. The complex tax code costs the economy billions of dollars of year and Americans spend long hours complying with all the complicated tax laws.
Second, the United States must lower its corporate tax rate. Currently, the United States has the highest corporate tax rate of all Organisation for Economic Co-operation and Development countries at 40 percent. This excessive tax rate has led to stagnant economic growth and companies fleeing the United States for countries with lower corporate tax rates such as Ireland, which has a corporate tax rate of 12.5 percent. Lowering the corporate tax rate would make the United States more competitive in the global market.
A couple months ago Bernie Sanders published a list of companies that will pay more if he becomes president. Not exactly. That list would be a list of companies that would probably leave the United States in search of a lower tax country. In order to stop companies from leaving the United States, the corporate tax rate should be lowered.
Washington and the 2016 presidential candidates should start listening to the voters. The time for tax reform is long overdue, but it will take ideas and action to make it happen.