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The Need for Simplicity

April 21, 2014
Weekly Columns



Once April 15 rolls around each year, there is an palpable sigh of relief in households across the nation because tax day is finally behind us. We recently passed that milestone again this year, and as usual, it was a sad reminder that America’s tax system is broken and needs to follow a more simple and straightforward model.

When it comes time to file taxes each year, Americans struggle with navigating the tax code. Rather than get easier, it continues to become more complicated, more burdensome and more expensive. Whether tax returns are mailed or e-filed, the expansion of the tax code has made the preparation process so confusing that many put it off, request extensions, pay someone else to prepare or nervously take a chance at filing independently. This is not how it should be. Looking back, this surely isn’t what was intended when the system was laid out.

In 1913, the Sixteenth Amendment to the United States Constitution established our nation’s modern income tax system, but over time that system has greatly expanded –and not for the better. Just over a century ago, the instructions for the 1040 form could fit on one page and the actual code on only 400 pages. But today, the instructions for that same 1040 form cover 189 pages, and our current tax code has climbed to nearly four million words. Not even the complete works of Shakespeare (about 884,000 words) or the King James Bible (more than 780,000 words) take up that much space. The code is now so complex that the instruction alone stand more than one foot tall when printed.

The many changes to the tax code over the years have ultimately caused more frustration than improvement. Statistics alone speak for reform of the tax system. With 1.2 million paid tax preparers in the United States, more than half of American taxpayers rely on paid professionals to file on their behalf, rather than navigating the complicated code themselves. In any given year, it is estimated that at least 6.1 billion hours and $431.1 billion are spent by taxpayers to ensure proper compliance with the law. It is irresponsible that the system requires taxpayers to incur additional costs simply because it’s too difficult to navigate otherwise.

Unfortunately, just as our tax code has significantly grown, so has our yearly tax bill. For 2014, federal taxes come in at $3.0 trillion and state taxes at $1.5 trillion. This means that if Americans devoted all of their income to taxes, it would take nearly four months or 111 days before we hit this year’s Tax Freedom Day on April 21—three days later than last year.

In additional to a more complicated code and larger tax bill, the enforcement of this onerous law falls to the Internal Revenue Service (IRS), an agency that was exposed last year for purposefully targeting conservative and religious groups seeking tax-exempt status. When it was discovered that the IRS had been drawing out a usually quick process for months and months or leaving applicants in complete limbo with no explanation, the American people demanded answers and House lawmakers led efforts to find them.

Almost a year later, the IRS still refuses to fully cooperate with House committee investigations that would prevent future abuse within the agency. In particular, the former Tax Exempt Organizations Director Lois Lerner, whose name surrounded the scandal, refused twice to testify before the House Oversight Committee by pleading the Fifth Amendment. This led to the committee’s recent vote to hold her in contempt of Congress—a strong call for accountability and demand for transparency in government.

Remembering how the IRS handled the scandal last year should leave Americans feeling uneasy about where their hardworking tax dollars are going, especially around tax day. After all, if there are known abuses in one part of the agency that violate the constitutional rights of Americans, it leads to suspicion across the whole agency and is just another justification for changing the current system.

House Republicans see the need for tax reform, and we have offered ideas to start discussion and negotiation. In fact, the budget that was recently presented by the Budget Committee and passed by the House sets out principles that should guide reform, including lowering the individual and corporate tax rates. The pro-growth principles in our budget blueprint this year reiterated the importance of reform, and I’m pleased that Republican lawmakers have already introduced plans with these ideas in mind, including those from Ways and Means Chairman David Camp, Congressman Michael Burgess and Congressman Rob Woodall.

While there is still room for improvement, I’m pleased that Republicans are actually offering solutions and driving conversation for a simpler, fairer tax system. In the days ahead, we must keep the focus on expanding opportunity and growing our economy—not lengthening the tax code or expanding the IRS.

Issues:Economy & Small Business