Taxpayers spend 6.1 billion hours a year just to comply with the federal tax code, according to experts at a Tax Foundation event on Monday.
Pete Sepp, president of the National Taxpayers Union, said that tax compliance costs taxpayers $234 billion per year in direct costs and lost productivity.
“The problem is the status quo—thinking that, well, if we don’t do tax reform this year it will just be that bad,” Sepp said. “No, the status quo is not the static quo—it’s going to get worse.”
“The paperwork burden inventory at the Office of Management and Budget related to Treasury is expected to rise by another 2 billion hours in the next few years,” he said. “One-third added to that, we’re looking at tax compliance costs of north of $400 billion a year.”
Sepp admitted that the failure of the Republican health care reform bill, with its projected deficit reductions, will make it more difficult for Republicans to pass a tax reform bill.
“This is the important point right now, it’s an especially important one in this current post-Obamacare repeal environment,” Sepp said. “We now have about a trillion dollars of baseline problem now that we didn’t think we would have before assuming Obamacare was going to be repealed.”
“That’s going to make tax reform a much tougher task,” he said. “It also means we’re going to have to find other ways of making every single simplification measure count, more so than it ever would have needed to count in the past.”
House Republican leadership withdrew the American Health Care Act on Friday ahead of a scheduled vote, following President Trump’s request that the legislation be pulled. Trump said tax reform would be the next item on the agenda.
A number of words come to mind; “obscene” is one, “insane” another, along with several less pleasant pejoratives.
So, what is the GOP leadership planning for tax reform, and how will it help this utter disaster? Well, here’s the plan put out by Republicans on the key Ways and Means committee. Some key items include:
- Save time and money by making it so that most Americans can do their taxes on a form as simple as a postcard.
- Consolidate the system down to three tax brackets, and lower the top individual income tax rate to 33 percent.
- Simplify tax filing for families by creating a larger standard deduction and a larger child and dependent tax credit.
- Cut taxes on small businesses by creating a separate, low tax rate of 25 percent for many on Main Street.
- Cut taxes on savings and investment by allowing families and individuals to deduct 50 percent of the dividends, capital gains, and interest received from stocks and mutual funds.
- Provide a tax-free return on new investment by allowing, for the first time ever, full and immediate write-offs.
- Restore American competitiveness by lowering our corporate tax rate from the highest in the industrialized world to 20 percent and shifting to a “territorial” system with more competitive rates.
- Create more certainty by eliminating the death tax, which can take up to 40 percent of a family business’s assets if the owner passes away.
House Democrats are calling this cruel, unusual, mean-spirited, draconian, and lots of other things. Here at the Casa de Animal we call it falling short of the mark.
Don’t blow it. This isn’t the time for half measures. Fix the damn tax code once and for all. The entire damn tax code shouldn’t be more than twenty or thirty pages long.
Fix. The. Damn. Thing. Now.