Though debate rages on over taxes and who pays how much, we can all agree that filing them each year is a costly, stressful process. It’s messy, time-consuming, and even when it’s over there is still the worry we’ve missed something and may end up having to pay the government even more. Of course, when dealing with a tax code that’s over five thousand pages long, the concern and confusion is understandable.
Each year, Americans spend more than six billion hours just to comply with our burdensome tax code. That means in 2008, Americans spent $163 billion in the cost of their own time poring over the code, not to mention what they also spent in collections to the IRS and other government fees. The current tax code is so complex, nearly ninety percent of Americans either purchased a computer program to help do their taxes, or hired a tax professional.
Did you know that the U.S has more professional tax preparers than police and firefighters combined? At 1.2 million, that’s almost as many tax professionals as active duty military personnel—it literally takes an army to prepare our nation’s taxes. But with a tax code that contains a myriad of loopholes and credits, you almost have professional help to get through them.
On top of the complexity we all face, American companies are paying the highest tax in the industrialized world. Our corporate tax rate is 35%, which on average is 14 percentage points higher than our international competitors. While countries like Japan are lowering their rates to attract business abroad, American companies spend billions of dollars each year complying with a tax code that picks winners and losers through loopholes and deductions.
Each year, businesses small, medium and large spend a lot of money navigating our tax code—and that is money not spent creating jobs, fostering innovation, or growing the economy. This is the 42nd straight month of unemployment above eight percent—we should be doing everything we can to get this nation back to work. Reforming our outdated, broken tax code is at the top of the list for pro-growth policies.
A tax code that is simpler and well thought out can ensure the United States is more competitive in the global marketplace. Our current tax code dates back to 1986-- when Top Gun was the number one movie and Larry Bird was the NBA MVP. Think about it: our convoluted tax system doesn’t match our 21st Century economy, and it’s holding us back.
For almost two years, the House of Representatives has been studying tax reform to prepare for a fundamental overhaul for corporations and businesses. Over the summer, we voted on a plan to ensure this gets done in 2013, while laying out the principles for a simpler, flatter, fairer tax code. The status quo of the tax code is clearly indefensible. That is why we are working to reform the tax code and work to get our economy growing again.