Senator John Thune
As the annual tax deadline quickly approaches, businesses and families across the country will sit down to review their receipts, earnings, and finances to submit their 2013 taxes. According the National Taxpayer Advocate, Americans spend $168 billion and more than six billion hours each year complying with our complicated tax code.
Our current tax system is complex and burdensome; it distorts economic behavior and hinders rather than promotes U.S. economic competitiveness in the global economy. This is why more than ever, Congress needs to start from scratch to fundamentally overhaul the tax code. Not only will tax reform make American businesses more competitive in the global economy, but it will also help to address our ever-expanding budget deficit by unleashing economic activity that will ultimately raise federal tax receipts, even at lower tax rates.
The last time the U.S. enacted comprehensive tax reform was in 1986. Since then, our tax code has grown considerably and has become a complex maze of special interest provisions and “temporary” tax measures. Navigating the tax code is difficult enough for corporations with teams of Certified Public Accounts, it is even more difficult for the vast majority of businesses in this country that are organized as pass-through businesses, which means they pay their taxes at the individual rates. In South Dakota, 93 percent of businesses pay their taxes at the individual rate, and 65 percent of all new jobs come from small businesses. These individual operations expend time and money complying with a tax code that could otherwise be spent hiring new workers or reinvesting in their businesses. If we want businesses to expand and hire we need to lower tax rates across the board, both for corporations and pass-through businesses. Letting Americans who are willing to go out into the marketplace and take risks keep more of their own money is the best way to foster economic growth.
Unfortunately, rather than moving forward with an agenda that will stimulate the economy and create jobs, the president and the Senate Democratic majority has decided to move forward with the failed economic policies of the past five years: tax, borrow, and spend. Earlier this year, in President Obama’s Fiscal Year 2015 budget request, he proposed over $1 trillion worth of tax increases. This in spite of reports from the non-partisan Congressional Budget Office that revenues to the Gross Domestic Product will remain above the historic average for the next 10 years—without any additional tax increases. This makes it clear that Washington doesn’t tax too little, we spend too much.Streamlining our tax code will strengthen our economy, improve the competitiveness of our businesses, and greatly ease the tax burden for all American families. As a member of the tax-writing Senate Finance Committee, I am committed to enacting policies that strengthen the middle-class by growing the economy and creating jobs and will continue to work with my colleagues to simplify the tax code for all Americans.