Time for Tax Reform
Each year, Tax Day is an unpleasant reality check on how complicated and outdated our tax code has become. Tax reform is next on our legislative agenda, and we have a once-in-a-generation opportunity to lessen the burden on American families and businesses.
When Washington last undertook comprehensive tax reform, Ronald Reagan was president, the average price of a new home in the U.S. was $111,900, and a gallon of gas cost 89 cents. Much has changed in our country since 1986, but our tax code has only become more complicated.
House Republicans rolled out a tax reform blueprint last year to start the conversation on how to make the tax code simpler, flatter, and fairer for all. As a member of the Ways and Means Committee, I had the opportunity to participate in tax working groups and help craft this proposal. I appreciate the feedback I have received from Nebraskans since the release of the blueprint and share your eagerness to get this important work done.
In early April, the Tax Foundation released a detailed analysis on how the blueprint would impact Americans. According to the report, the proposal would lead to 1.7 million new full-time jobs and raise household incomes in every state, allowing families to save an average of $4,917 more of their annual income.
The Tax Foundation also examined how residents of each state would benefit from the blueprint. Nebraskans would be able to save an estimated $5,261 more in after-tax income each year. Clearly, simplifying our tax code is one of the best ways we can grow our economy and create greater opportunity in our state and nationwide.
Americans currently spend six billion hours preparing their tax returns, with an average of 15 hours for each return. Understandably, 90 percent of taxpayers hire outside professionals or use computer software to help them file. Our overly complicated tax code makes it easier for those who want to cheat to do so and harder for the majority of Americans, who are trying to do what they are supposed to do, to comply.
Under the blueprint, nine out of 10 Americans could file their taxes on a form the size of a postcard. The proposal would flatten the tax code, reducing the number of tax brackets from seven to three and lowering rates.
Additionally, the blueprint restructures the IRS to make customer service its top priority. Stronger protections would be put in place to safeguard confidential taxpayer information, and an IRS commissioner could only serve two three-year terms.
Repealing the Death Tax remains a top priority for Nebraskans. This onerous tax doesn’t penalize the wealthiest Americans – they can plan their estates and give away their wealth as they see fit. It penalizes those who have worked all their lives and reinvested in their family businesses, such as Nebraska’s farmers and ranchers.
Our blueprint would eliminate the Death Tax, ending this threat to family farms, ranches, and small businesses once and for all.
A comprehensive overhaul of our tax code would make filing less cumbersome and allow Americans to keep more of their hard-earned money. As we face another Tax Day, this is welcome news for all taxpayers.