To most Americans, 37 hours is practically a workweek.  To the Internal Revenue Service, it is the amount of time they estimate it takes a taxpayer to prepare the basic short form. 

 

It’s no wonder. According to the Tax Foundation, as of 2005, the Internal Revenue Code contained over two million words – a nearly 20% increase since 1995.

 

To help taxpayers navigate a tax code that is 470 times the number of words in the U.S. Constitution, the IRS issues over 200 tax forms and puts out more than 1,000 publications, forms, and instructions. These are all conveniently alphabetized on the IRS website from the 1040 Short Form to the 5304-SIMPLE. Not to be confused, of course, with the 5305-SIMPLE, the 5205-SA, the 5305-S, or the 5306-A. Simple enough?

 

If not, taxpayers can refer to the frequently asked questions section of the IRS website, where commonly-made queries are organized into one of seventeen Frequently Asked Question Categories, and further subcategorized for easy reference. 

 

Today’s tax system is anything but simple.  But it is not just complex and frustrating, it is costly.  Individuals spent $29 billion a year for tax software, tax preparation services, postage, and other out-of-pocket costs related to filing their federal income tax—that is twice the size of Iceland’s economy. 

 

Not only is our current tax collection system expensive for individuals to comply with, it is expensive for our government to run - $12.7 billion this year to be exact.  In January of last year, the IRS employed 92,690 people—more than the combined number of employees at the Departments of State, Labor, Energy, Housing & Urban Development, and Education.

 

This year, the average American will work the first 103 days of the year to pay their federal, state, and local taxes, according to the Tax Foundation.  This past Monday, April 13th marked “Tax Freedom Day,” the day on which the average American will start working for anything besides taxes.  Comparatively, in 1910 when taxes were just 5% of a person’s income, Tax Freedom Day fell on January 19th.

 

Additionally, the National Taxpayers Union reports that 32.6% of all tax returns are non-paying returns.  In addition to the non-payers, roughly 15 million individuals and families earned some income last year, but not enough to be required to file a tax return. Adding the non-paying returns to the non-filers gives you roughly 57.5 million income-earners who will be paying no income taxes.  Even 57.5 million is not the actual number of people in our nation that don’t pay federal income taxes because one tax return often represents several people. When all of the dependents of these income-producing people are counted, roughly 120 million Americans – 40 percent of the U.S. population – do not pay federal income taxes.

 

America needs a new tax code – one that is simple and equitable. I support an optional one-page flat tax as outlined in H.R. 1040, which would allow businesses and individuals to opt for a flat tax rate of 19%.  The rate would decline to 17% after two years of participation.  This simple one-page flat tax from would not need a Frequently Asked Questions page, because it would take less than 30 minutes to accomplish, saving American individuals and businesses billions in tax preparation costs.  Of course, for the many families in the 25% tax bracket or higher, this plan will take money out of the hands of those in Washington and back into the hands of the people that earned it.  As one of the 17 Members of Congress to vote against each of the spending bailouts over the last two years, I believe we cannot act soon enough to put a freeze on the amount of money Washington spends.

 

Until tax code replacement becomes a reality, however, I am also working to improve our current system by:

 

Balancing the Federal Budget – I’ve cosponsored H. J. Res. 1, proposing a balanced budget amendment to the Constitution of the United States. This resolution would reign in the out-of-control spending that is driving tax rates up now and likely in the future.  In addition, it would mandate that Congress could not increase our federal debt except under extraordinary circumstances and with three-fifths approval by each house of Congress.

 

Reducing the Current Tax Burden – I’ve supported H.R. 470, a bill that would reduce income taxes by 5% across the board, increase the child tax credit, make the lower capital gains tax rate permanent, and repeal the Alternative Minimum Tax, among other things.

 

Making these changes would go a long way in reforming our tax code into a simpler, less costly, and more equitable system.  Perhaps one day we might even be able to do our taxes in the time it takes to have a lunch break, rather than a work week.