What a waste. Not only is our 70,000-page tax code bloated, inefficient, unfair, anti-growth, subject to cyber-attacks, and antiquated; complying with The Beast is an incredibly inefficient use of America’s resources. Just filing the returns requires Americans to spend 1.4 billion hours and costs us over $20 billion. For the average business, it requires twice the cost and effort.
Thus, my number one priority in reforming our tax code will be to dramatically simplify The Beast.
The code is littered with loopholes and gimmicks. This year tax breaks will add up to over $1.4 trillion, costing the federal budget more than Medicare & Medicaid or Social Security. Some of the tax breaks are valid, most aren’t. And because you need to either have a tax bill or must itemize in order to claim most of these tax breaks, these 200-plus items significantly benefit the wealthy over the working poor and middle class.
I will dig into this morass and identify which of these tax breaks grow the economy and which are simply “give-aways” to entrenched special interests. Once we get rid of the gimmicks and loopholes we can then lower tax rates.
Addressing the personal income tax code is obvious, but making our corporate tax code more competitive is also very important. The United States’ top marginal corporate tax rate of 39% is higher than every other nation in the world, except for Chad and the United Arab Emirates.
In fact, we are 1 of just 9 countries that has a corporate tax rate of 35% or higher and are far above the global and developed world average. And the disparity between us and the rest of the world have only grown over the last decade.
Our corporate tax code places American businesses at a severe disadvantage globally. It is no surprise, then, that companies are shifting resources and jobs overseas. If we streamline our corporate tax code and lower rates to bring them in line with the OECD average, our businesses can reinvest that money in America, not abroad.
The tax system plays an essential role in our economy by providing us with the funds necessary to perform essential functions. However, the current system is unnecessarily burdensome, impedes economic growth, and favors the powerful.
Simplifying the code, eliminating gimmicks and loopholes, and lowering the marginal rates will not only provide a major boost in our economy but will help to begin to restore America’s faith in our federal government.