Another Tax Day has come and gone, and the question remains: When, oh, when, will our political leaders reform the tax code to a) make it more user-friendly and b) use it to create economic growth for anyone other than accountants and tax lawyers?
Americans have once again spent more than 6 billion hours total preparing their tax returns. It would be a gross understatement to say the tax code is unwieldy; at more than 75,000 pages, the tax code creates an undue burden on individuals, families, and small-businesses.
Each year, Americans spend more than $400 billion on tax attorneys, CPAs and other tax professionals to ensure they have complied with all of the various aspects of the tax code. The simple truth is that every dollar spent preparing tax returns is a dollar not spent growing the economy. Economists estimate that just the tax code’s excessive compliance burdens create an annual loss of economic growth ranging from $148 billion to $609 billion. That amount of unrealized economic growth is staggering - and reminds us of just how damaging our current tax code is.
Besides the tax code’s sheer volume, another daunting aspect for taxpayers is its complexity. The intentionally abstruse and technical language of the tax code makes it inaccessible to most Americans. It is troubling, of course, that we are legally required to obey a regulatory code that most of us cannot even comprehend. One of the pernicious side effects of the tax code’s complexity is that it is an invitation for mischief. Consider, for example, how the IRS agents were able to use the impossible-to-understand tax code as a political weapon for years to harass and target conservatives.
When IRS Commissioner John Koskinen, former IRS official Lois Lerner, and other bureaucrats from the agency have testified before Congress about the agency’s abusive and unconstitutional unequal treatment of American citizens, they have routinely blamed the tax code itself. IRS officials to this day maintain - laughably and absurdly - that the unprecedented targeting of conservatives was the result of the tax code’s ambiguities and lack of clarity regarding tax-exempt organizations. What more proof could we possibly need that the tax code is badly in need of reform?
At Tea Party Patriots, we are advancing tax reform that would simultaneously reduce compliance costs and minimize the expansive role that the IRS plays in the U.S. economy.
We believe a proper tax reform plan would accomplish the following three goals: Raise the revenue necessary to fund proper activities of government at the lowest level possible, apply lower and fewer tax rates to a broader base, and drastically cut compliance and administrative costs.
Fortunately, one of this year’s presidential candidates has a tax proposal that would accomplish all of those goals.
Sen. Ted Cruz’s tax reform package would introduce a flat income tax, would reduce the taxation on investment, and would, according to the Tax Foundation, grow the economy by 13.9 percent. Even better news is that the Cruz tax plan would increase incentives to work, resulting in an anticipated growth of 4.8 million full-time or equivalent jobs. Imagine that - a tax code that spurs economic growth and job creation, rather than our current plan that impedes growth and creates disincentives to invest or create jobs.
Perhaps one of the greatest benefits of Sen. Cruz’s tax reform proposal is that it would scale back the IRS. With a more streamlined tax code, the IRS could be significantly reduced.
The United States’ sluggish economy is in dire need of total tax reform that will scale back the burdens on families and businesses, jumpstart the recovery, and rein in the IRS, which has been unchecked in its power for far too long. As Americans heave a collective sigh of relief that another Tax Day is behind us, it’s worth remembering that it doesn’t have to be this hard. Sen. Cruz’s tax reform proposals remind us that there is a better way.