NOEM: A tax code that's ready for an upgrade
By this time, most of us have gathered all the forms from our employers, our banks and others. We've found and filled out the confusing tax documents — or more likely, bought software or hired a professional to fill them out for us — and sent it all in to the IRS, hoping we don't hear from them about it again.
Today's tax code is more than 70,000 pages long and getting ready for the April 15 tax deadline reminds each of us of how complicated it really is. Filing taxes has become a complex and time-consuming process that takes about 6 billion hours and more than $160 billion a year.
The reality is that we pay taxes every day of the year. Take a look at your paystub at the end of the month and you'll see just how much comes out of the paycheck we use to feed, house, and entertain our families. While there are many ideas about how our tax code should be reformed, few would disagree that we're due for some changes.
The last time we passed comprehensive tax reform the Berlin Wall was standing, virtually no one had a personal computer, and Top Gun was debuting in movie theaters. Needless to say, the world has changed a lot since then.
We need a tax code that is going to encourage the economy of today, not the economy of the 1980's.
The U.S. currently has the highest corporate tax rate in the developed world, which impacts both workers and consumers, and both the personal and corporate tax codes are filled with loopholes that pick winners and losers. More often than not, Americans feel those loopholes benefit corporations and special interests who can afford expensive lawyers and accountants while everyday taxpayers are left paying the tab.
We need to figure out how Americans can keep more money in their pockets for their families.
The Chairman of the House Ways and Means Committee, which has jurisdiction over tax policy, recently released one plan to begin the discussion. It's not perfect and it's not finalized, but it begins to paint a picture of what our tax code could look like.
It collapses the seven existing tax brackets into two — one with a 10 percent tax rate and the other with a 25 percent tax rate. It would also close many of the loopholes that large corporations have negotiated over the last quarter century.
I'm still combing through this plan to analyze the details and assess how the overall plan would impact our economy, but I'm glad we have a place to begin the discussion and I'm pleased to see the committee chairman take on this difficult, but incredibly worthy, task.
In the end, I'm looking for a plan that will make the tax code simpler, fairer and easier for families and Main Street businesses. It must be done in a way that supports economic growth, encourages companies to start hiring again, and allows families across the board to take home bigger paychecks. Any reform of our tax code must also tackle fraud, abuse and mismanagement at the IRS to better protect hardworking taxpayers.
Simply put, the existing tax code is a nightmare. It's too complex. It's unfair to families. And it requires that far too much be taken out of people's paychecks each month. As many in South Dakota finish up the stack of paperwork that is required each Tax Day, know that we're working to find a solution. Ideas are being put forward and we're ready to create a tax code that will leave more money in your pockets and put more jobs in our communities.