Enough tax code tinkering; overhaul the nation’s laws

Almost three-quarters of Americans told pollsters on Election Day they think the economy is rigged to favor the well-off and wellconnected. How could so many people in the richest country on earth have such a cynical opinion of their home?

One place to look for answers to that question is the tax code.

Our tax laws reward lobbying for special favors more than hard work. They’re too complicated and make compliance costly for individuals and businesses. They take too much of our hard-earned money. And they kill jobs.

It has been more than 30 years since the tax code was overhauled. But there has been plenty of tinkering since then, mostly for the worse. Since 2001, there have been 5,867 changes to the tax code, which today stands at an almost incomprehensible 4 million words. Among those 4 million words are stashed more than $1.5 trillion in carve-outs and loopholes for favored interests.

We need to overhaul our tax laws now to get rid of those breaks for the well-connected, let ordinary Americans keep more of their money, and boost job growth.

As Congress begins the debate on tax reform, you’re going to hear a lot of squawkers make the usual complaints that tax reform is an effort to “cut taxes for the rich.” It isn’t true. But don’t take our word for it. “By tax reform, I mean closing loopholes, special interest tax breaks and corporate subsidies,” Florida Sen. Bill Nelson said five years ago. That’s still a good recipe today.

This vision of tax reforms means lowering rates while closing special-interest loopholes for the powerful and well-connected, and killing the kind of corporate welfare that feeds the system and is in turn fed by it. It doesn’t mean replacing a tax on us with a tax on them. That’s why it was so important to get rid of the border adjustment tax, which would have made nearly everything consumers and businesses buy cost more, early in the process.

Our corporate tax rate, the highest in the developed world, encourages American businesses to move their operations and jobs out of the United States.

The system is also too complicated, largely a result of all the special favors handed out over the years.

How complicated? Think about this: 90 percent of individuals and businesses that file a tax return either hire someone to do it for them or use tax preparation software to help out. But even that is no guarantee of getting it right. An undercover government investigation sent the same tax return information to 19 tax preparers. Exactly two came up with the right amount for the refund.

If people who make their living filling out tax returns can’t figure out the system, how are the rest of us supposed to?

It's a demoralizing and intimidating process, and it shouldn’t take an advanced degree to get it right.

Americans waste $195 billion a year on tax-related paperwork — that’s money that could be used to save for college, buy a home, or grow your business so you can hire more people.

And money is not all that’s being wasted. Americans spend 6 billion hours a year on tax-related paperwork. According to the IRS’s Taxpayer Advocate, that’s equivalent to more than 3 million full-time workers — put another way, just about the same number of people who work for Walmart (Florida’s largest employer), IBM and McDonald’s.

Big companies don’t mind all that complexity. They have offices full of accountants and lawyers to seek and find every break in the code. Smaller businesses and ordinary taxpayers don’t.

Tax reform is about restoring Americans’ faith in a system that for too long has not earned or deserved their faith.

Ron DeSantis is a U.S. congressman representing Florida’s 6th District. Daniel Garza is president of the LIBRE Initiative.