- - Thursday, March 12, 2015

As tax day approaches, there are quite a few Americans who are dreading the thought of filing their tax returns. First off, the federal tax burden is much too high in our country. Secondly, the tax code has become so complicated that it typically takes someone with advanced degrees to prepare even the simplest returns.

What bracket am I in? What percent is the rate? Do I qualify for any deductions? What about credits? What’s the difference? Should I take the standard deduction or itemize deductions? What if I own a business? Do I file a separate return? Or do I claim it as personal income? Will I owe money on April 15th? Will I get money back?

These are some of the easier questions to answer – and they only represent a minute amount of the questions that taxpayers are faced with each year.

Filing taxes should not be this complicated. Taxpayers spend more than six billion hours a year preparing their taxes. That is an astronomical amount time. To put that number in perspective, it is the equivalent to nearly 700,000 years.

According to a 2011 report published by the Laffer Center, taxpayers spend about $31.5 billion in direct outlays to file their taxes – which includes the costs of hiring a professional or purchasing tax software. The report also details other associated costs, including the dollar value of the time spent to prepare tax returns.

In total, the Laffer report estimates, “U.S. taxpayers pay $431.1 billion annually, or 30 percent of total income taxes collected, just to comply with and administer the U.S. income tax system.”

If taxpayers are spending nearly a third of the amount the federal government gets in income tax revenue, something is very wrong.

But that highlights my other point. We simply pay too much in taxes. The federal government takes more than $1 trillion in income taxes from hard-working Americans every year.

With government growing at a feverish pace and the tax code getting more complex, I would expect the folks in Washington to take a serious look at tax reform. Luckily, Sens. Marco Rubio, Florida Republican, and Mike Lee, Utah Republican, have put forth a plan that will start the much-needed conversation on this topic.

The president has failed to lead on tax reform – and many other things for that matter. That is why it is up to congressional leaders to have a discussion with the American public about how to best move forward.

Under the current system, the rates are too high, the brackets are too numerous and the loopholes are too unfair. Big businesses and wealthy individuals can afford high-priced accountants to navigate the tax code, while small local companies and middle class families get stuck with an ever-increasing bill.

Under the Rubio-Lee plan, the brackets would be reduced to two, 15 percent and 35 percent. The corporate rate would be capped at 25 percent. Most itemized deductions would be eliminated, along with most business tax credits and the estate tax.

According to the non-partisan Tax Foundation, the plan would initially lead to a drop in revenue for the federal government. However, taxpayers would have more of their own money to spend, which in the long run would lead to faster economic growth.

Over 10 years, it would grow the economy by an additional 15 percent. Wages would rise by 12.5 percent and the level of employment would increase by 2.7 million jobs.

This would obviously be welcome news for every taxpayer. Is the Rubio-Lee plan perfect? Probably not. However, it is a major step forward. It would be much better than the current system and can be the first draft of what is hopefully a comprehensive tax reform package.

Congressional leaders in both houses owe it to American taxpayers to finally have a real conversation on this issue. President Obama should also be open to leaning across the aisle and actually listening. I won’t hold my breath after watching him veto the Keystone Pipeline.

But who knows? Federal tax reform could be just around the corner.

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