Congress can go big with Tax Reform

Sean Hannity, on his radio show this week, was interviewing a member of Congress and practically begged him to get in a room with his colleagues and come up with a list of priorities and present them to the American people. Astute readers of Patch.com will know that the week before I implored Congress to do exactly that. The reasons are simple: Congress has become irrelevant to the vast majority of people whose primary concerns are paying bills on time, taking their kids to school, advancing careers or finding a job.

Now I know that Sean Hannity is a polarizing figure in the media to a significant number of voters in blue-state Maryland and a number of readers will dismiss this article outright simply because his name is in the first sentence. On the other hand, if you know a good idea when you see one, wherever and whomever it comes from, then please read on. There is a lot of work to do to make Congress meaningful to regular people.

What Hannity was alluding to is an institutional problem in the U.S. Congress. It has lost the ability to solve problems due to a number of factors. Foremost among them is the fact that members of Congress enjoy high salaries, are accustomed to being driven around in SUV’s, are catered to by a staff of 15 or more on any given day and are pleased with holding elected office and feel power in the marble hallways in the U.S. Capitol. The American people are not pleased, they are disgusted, and rightfully so.

They manage chaos and dysfunction in their daily lives by prioritizing problems and dealing with them one at a time. So people wonder why Congress is incapable of doing the same. In my 10-point plan to reform Congress, point number three is to tackle a huge problem affecting everybody. That problem is the nightmare of filing tax returns.

According to the Tax Foundation, Americans spend $20 billion annually in compliance costs. This is not the cost of actually paying taxes, but only the cost of filing. That is because people have to pay H&R Block or find an accountant because the tax code is too complex for anyone to understand. Accountants don’t understand it either. There over 70,000 pages of instructions required to properly fill out 1040 forms. The time consumption is a further burden. Individual filers spend over 1.35 billion hours every year complying with tax regulations.

I have a five-year plan to replace the current tax code with a more simple, flatter and fairer system that reduces the overall tax burden, eliminates complicated and wasteful deductions and credits and enables the economy to grow at twice the rate it is now.

First, we collapse the current seven brackets into no more than four and evaluate its effects on the federal budget the year following enactment. Then, we will move to a flat tax where everyone pays the same percentage and can fill out their returns on a postcard and then evaluate its effect. Finally, Congress will evaluate a fair tax in year five that will eliminate the IRS and enable Americans to keep what they earn, paying taxes on what is consumed, not produced.

Under this approach, we can measure the progress of dynamic growth through lower taxes and end the partisan bickering that has stymied reform of the code since 1986. Moreover, a flat or fair tax leads us to a modern tax code- one that enables filing returns on a smart phone instead of handing a shoe box full of paper receipts to an accountant.

Congress can do big things, or small things. Reforming the tax code is big and will have a major impact on reducing household expenses and paperwork requirements. When Congress is able to do that, then we can move past the discussion on which media celebrity bashed the Senate and House on any given week. Sean Hannity said something everyone outside the beltway agrees on.

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