April 14 , 2005

The Tax Code Needs a Checkup

WASHINGTON, D.C. – Congresswoman Deborah Pryce (R-Upper Arlington) today submitted the following editorial:

“What is the one thing Americans will spend more on this year than food, clothing and shelter combined?

TAXES.

That’s right. The typical American family spends 38 percent of its income in total taxes versus 28 percent for the list above.

But Congress and President Bush are working to lighten the load. The tax plans enacted in 2001 and in 2003 have offered all Americans real relief. Today, the average American family of four making $39,000 a year is saving $1,100 more under the current tax relief plan than they did five years ago. Tax Freedom Day for our 2004 taxes, the day when workers have finally earned enough to cover their taxes, was April 11th, the earliest date in 37 years. Under the previous Administration, Tax Freedom Day didn’t come until May 2 nd, the latest Tax Freedom Day date in history. Thanks to the current tax relief plan, Ohioans have $5.6 billion more in disposable income per year and an addition $2.7 billion in personal savings.

Still, Tax Day is met with dread and despair. A recent poll found that more Americans would rather get a root canal than struggle through their taxes. Something is not right with our tax system. The current federal tax code is made up of four huge volumes that are each thicker than the Bible and more than seven million words long! No wonder it takes the average American more than 10 hours to complete their taxes. Albert Einstein even said that preparing his tax return was “too difficult for a mathematician. It takes a philosopher.”

Of course, these days computer programs and accountants are able and willing to help shoulder the load, but they only highlight the problem that our tax code is too complex and outdated. Congress can only do so much in the form of tax relief. In our efforts to do the heavy lifting, the tax code itself becomes more burdensome.

There are current pieces of the tax code that need to be modified or eliminated. The Alternative Minimum Tax, which was originally designed to keep wealthy taxpayers from beating the system, has become a tax hike on many middle-income families. I plan to lead legislation in Congress this year to revise the AMT so that average Americans are not wrongfully overtaxed. Another unfair portion of the tax code has been the Estate Tax. Better known as the “Death Tax,” this incredibly onerous tax has prevented many Americans, particularly small business owners and farmers, from keeping their businesses and farms within the family. That’s simply un-American. I am pleased to report that the House this week voted to permanently repeal the Estate Tax in 2010.

Some people would like to take tax reform a step further and abolish the tax code and institute a new system. There are advocates for a National Sales Tax who propose replacing the federal income tax with a 23 percent sales tax on all goods and services. Others suggest a Flat Tax, which would eliminate all loopholes and itemized deductions in the current system in favor of a tax on a flat percentage of income. Interestingly, the flat tax is the system former U.S. administrator Paul Bremer instituted in Iraq. Still others would like to see the U.S. adopt the Value Added Tax, a system under which tax is imposed on goods during each phase of production. Many European countries use the V.A.T.

No matter what system you favor, the fact is that the majority of Americans agree that the current tax system is flawed, unconscionably complex, and in desperate need of reform. I look forward to the continued dialogue in Congress and in central Ohio to find ways to make the tax code simpler and fairer for all Americans.”