Incoming Senate Finance Committee Chairman [mc_name name=’Sen. Orrin Hatch (R-UT)’ chamber=’senate’ mcid=’H000338′ ] (R-UT) released a 350-page primer on tax reform – individual and corporate – outlining the issues lawmakers will have to tackle in an effort to reform our tax code. As the committee noted in an accompanying press release, “At over 70,000 pages in length, the U.S. tax laws are a labyrinth of red tape. The current tax system is anti-competitive, complicated, unfair, and is hurting economic growth”—a sentiment I (along with many, many, many others) have expressed time and time again.
It’s been over 25 years since our tax code was overhauled by Congress and if it were a car, it would be long past due for its 30,000 mile checkup. That’s no more evident than when it comes to the corporate tax code. The United States currently has the highest corporate tax rate in the world at 39 percent while other industrialized countries that comprise the Organization for Economic Cooperation and Development (OECD) stand at an average of 25 percent. It’s no wonder American companies are struggling to compete on the world stage. And not only are they subject to higher taxes than their global counterparts, but they pay double the taxes on any profits earned overseas.
As the Finance Committee’s report notes, we need a tax system that “enhances efficiency, fairness and simplicity” as “reform is vital and necessary to our nation’s economic well-being.” The creation of a simpler, flatter and more fair tax code will help accomplish a number of important things from a conservatives perspective. The first is that through a simpler and lower corporate tax rate our economy will become more competitive and growth will be driven by private sector productivity rather than government largesse. Secondly, and just as important is that one of the primary effects of tax simplification is elimination of special interest loopholes that lead to crony capitalism. Lastly, as [mc_name name=’Sen. Mike Lee (R-UT)’ chamber=’senate’ mcid=’L000577′ ] recently wrote about tax reform, “It would help restore upward mobility at the bottom of our economy and fair competition at the top. And it would restore equal opportunity to working parents, America’s ultimate investor class.”
With the new Congress readying to convene in January there is real hope that tax reform could pass. In the past event some Democrats have expressed interest in working on the problem. Republican legislators must remember when working on this issue that the problem unsolved is dragging down our economy, hurting main street entrepreneurs and causing economic suffering by our middle class- lack of action is un-acceptable.
The country needs to get back into a car that not only works, but can keep up with others on the road.