It’s often said that the only two sure things in life are taxes and death. It seems no one wants to pay taxes, but they are necessary if we have roads, schools, electricity, water, garbage service, police and fire protection, and other services.
We elect county commissioners and city councilmen to oversee these services and decide the cost and levy the tax we need to pay for them. Unlike the federal government, we have more say in our local government and the amount of taxes we pay.
Before the iPhone, the near-universal ownership of a personal computer, and the fall of the Berlin Wall, the United States passed a 26,000-page tax code. In the 30 years since, very few reforms have been made to modernize that tax code – only loopholes added that have nearly tripled its size. Soon, it will be time to file income taxes, and 9 out of 10 taxpayers will use either a professional tax preparer or computer software to file their taxes, simply because they understand neither the complicated tax code nor understand the complicated tax laws we now have.
The call for comprehensive tax reform has been made for years and it’s frustrating that it seems as though little has been done. Tax reform has been promised and talked to death, but there has been little action. Now, President-elect Donald Trump has said tax reform will be one of the first things he tackles when he takes office. We’ll see, this coming from a billionaire, who, admittedly has paid little to none taxes.
Earlier this year the House Ways and Means Committee – where tax reform begins – released a blueprint for pro-growth tax reform. Simply put, it is designed to grow families’ paychecks, the workforce, and the American economy. More specifically, the proposal centers around three ideas. First, the tax code should be simpler, fairer, and flatter. Second, it should make it easier to create jobs, raise wages, and expand opportunity. Finally, it should put taxpayers first, and do away with loopholes.
Since taxes are a must and they pay for interstate highways, the school lunch program, health care, and many other programs that are helpful, most do not mind paying taxes, they just want everyone to pay their fair share. It’s not fair for the rich to pay less taxes than others.
The new tax blueprint is all about simplicity, which means reducing the amount of tax brackets from seven to three. The committee has gone through and eliminated many of the most damaging add-on taxes, such as the death tax. Finally, they have made sure important “milestone” tax breaks remain to help give families peace of mind at critical moments in life, such as going to school, getting a job, raising a family, or planning for retirement.
To make it easier to create jobs and raise wages, the proposal offers to cut taxes on small businesses, creating a separate, low tax rate of 25 percent for many on Main Street. Because U.S. businesses currently have to pay the highest corporate tax rate in the world, it also lowers the corporate tax rate to make America a more competitive place to do business.
Ensuring taxpayers come first meant the committee needed to tackle some pretty serious issues within the IRS — an agency that in recent years has allowed millions of taxpayer calls to go unanswered, targeted conservative organizations, and failed to operate in an ethical manner time and again. This blueprint outlines a restructured IRS that is held accountable to the Taxpayer Bill of Rights and set up to provide excellence in customer service. It would also install a new, term-limited commissioner who would be required to administer the new tax code fairly while keeping politics out of the IRS.
This blueprint is just the beginning of the conversation. It isn’t perfect or set in stone, but the committee has taken the initiative to draw the outline; now, it’s time for the details. The goal is to turn this plan into detailed, comprehensive legislation that can be moved when a new administration takes office in January.
If a family or business did things like they did in the 80’s, they’d still be relying on a fax machine. The world doesn’t work like that anymore and neither should our tax code.