Fix the tax code

Simplify it to help Americans

As I travel the state listening to hardworking Arkansans, I hear many of the same concerns: Wages for too many workers have been stagnant for far too long. Meanwhile, the prices of goods and services, especially college tuition and health care, have increased significantly during the same time, putting a squeeze on working-class and middle-class Americans.

Our economy needs more than a shot in the arm: It needs structural reform. That’s why I’m pleased that the U.S. Congress is tackling the issue of federal tax reform for the first time in more than 30 years.

As a former member of Congress and member of the House Ways and Means Committee, I have long advocated for bold tax reform to fix our tax code, make it simpler, and reduce the overall burden on hardworking Americans. The federal tax code as it exists today is broken. It discourages job creation, is hopelessly convoluted, and takes too much from the pockets of hardworking Americans.

In order to grow more jobs, we must fix our tax code. First, among developed nations, the U.S. has the highest corporate income tax rate in the world, according to the Organization for Economic Cooperation and Development. This has resulted in companies leaving our shores because it’s simply more cost-effective to operate overseas.

Second, the federal tax code incentivizes companies to keep foreign earnings overseas. Within the last decade, businesses have earned approximately $2.5 trillion overseas. These earnings are never returned to the United States for investment because the federal tax code incentivizes companies to keep those funds overseas. By lowering taxes, we can make our business climate more competitive, bring overseas investment back to America, and grow jobs. The nonpartisan Tax Foundation has estimated that the GOP tax bill will lead to an increase of 8,277 full-time jobs in Arkansas alone.

Tax reform will simplify the lives of many Americans. Our current tax code is nearly 4 million words long — double the length of the King James Bible and the entire works of William Shakespeare combined. The practical result of this overly complex tax code is that the average American has no hope of understanding it without hiring accountants and lawyers. A staggering 94 percent of families need professional help to do their taxes, and a 2009 poll found that more Americans would rather have root canal surgery than an IRS audit.

And it’s not just individuals who crave simplicity: the National Federation of Independent Businesses reports that small businesses spend between $15 billion and $16 billion every year on tax compliance. Tax reform will help simplify our tax code by reducing the number of tax brackets, lowering the overall rates, and eliminating carve-outs and deductions that special interests have packed into the tax code over the years. The House and Senate tax proposals nearly double the standard deduction — delivering serious tax savings to Arkansas families. With big, bold tax reform, most Americans will be able to do their taxes on a postcard instead of the arduous process we currently undergo each spring.

Most importantly, tax reform will improve the lives of hardworking Arkansans by leaving more money in their pockets. Individuals and families know how to spend the fruits of their labor and provide for their families better than bureaucrats a thousand miles away. Tax reform will allow Arkansans to save for the future, pay off credit-card debt, or simply make ends meet. How much would the average Arkansas family save? The Tax Foundation estimates an average gain in after-tax income of $2,020 for middle-income families here in Arkansas.

It’s impossible to tackle big problems without meeting resistance. Some are already fighting to preserve the status quo. It’s important to remember that while the current House and Senate proposals are not perfect, they are also not finished. Would I personally like bigger and bolder tax reform? Sure! But our big-spending government and $20 trillion in debt severely limit our options.

I applaud Arkansas’ U.S. House members for unanimously supporting the House tax reform bill. Our federal delegation will continue to improve the bill throughout the legislative process, and the two proposals will meet in conference committee to make a good bill even better. In any event, let’s not let the perfect be the enemy of the good.

The last time Congress enacted permanent tax reform that benefited hardworking Americans, I was graduating from high school — and I’m 49 years old! It’s time to stop kicking the can down the road on tax reform so that we can grow jobs, create a simpler tax code, and let hardworking Americans keep more of what they earn. That’s what the American people expect, and that’s why we should support Republican tax reform efforts in Congress.