A Blueprint for Tax Reform
By Rep. Kristi Noem
Before the iPhone, the near-universal ownership of a personal computer, and the fall of the Berlin Wall, the United States passed a new, 26,000-page tax code. In the 30 years since, very few reforms have been made to modernize that tax code – only loopholes added that have nearly tripled its size. No wonder 9 out of 10 taxpayers use either a professional tax preparer or computer software to file their taxes.
The call for comprehensive tax reform has been made for years and it’s frustrating that it seems as though little has been done. That was one of the reasons I pushed so hard to join the House Ways and Means Committee this Congress. Out of the House of Representatives’ 435 members, what happens to our tax code starts with the 24 majority members of the Ways and Means Committee. That is where I needed to be, so I was grateful to be named to the committee this year – the first South Dakota Representative in history to do so.
Earlier this summer, the committee released our blueprint for pro-growth tax reform. Simply put, it is designed to grow families’ paychecks, the workforce, and the American economy. More specifically, the proposal centers around three ideas. First, the tax code should be simpler, fairer, and flatter. Second, it should make it easier to create jobs, raise wages, and expand opportunity. Finally, it should put taxpayers first.
This blueprint is all about simplicity. In fact, we tried to make it simple enough that most Americans could do their taxes on a postcard. That meant reducing the amount of tax brackets from seven to three. We then went through and eliminated many of the most damaging add-on taxes, such as the death tax. Finally, we made sure important “milestone” tax breaks remained to help give families peace of mind at critical moments in life, such as going to school, getting a job, raising a family, or planning for retirement.
To make it easier to create jobs and raise wages, the proposal offers to cut taxes on small businesses, creating a separate, low tax rate of 25 percent for many on Main Street. Because U.S. businesses currently have to pay the highest corporate tax rate in the world, it also lowers the corporate tax rate to make America a more competitive place to do business.
Ensuring taxpayers come first meant we needed to tackle some pretty serious issues within the IRS – an agency that in recent years has allowed millions of taxpayer calls to go unanswered, targeted conservative organizations, and failed to operate in an ethical manner time and again. This blueprint outlines a restructured IRS that is held accountable to the Taxpayer Bill of Rights and set up to provide excellence in customer service. It would also install a new, term-limited commissioner who would be required to administer the new tax code fairly while keeping politics out of the IRS.
This blueprint is just the beginning of the conversation. It isn’t perfect or set in stone, but we’ve taken the initiative to draw the outline; now, it’s time to color in the picture. While we included the ideas that so many taxpayers have talked about and urged for years, we’ll continue looking for feedback and insight. The goal is to turn this plan into detailed, comprehensive legislation that can be moved when a new administration takes office in 2017.
If a family or business did things like they did in the 80’s, they’d still be relying on a fax machine. The world doesn’t work like that anymore and neither should our tax code.