Stuff You Don’t Know about Our Federal Tax Code
Here are some things you need to know about the current system of federal taxation:
- The current tax code is more than 74,000 pages. A little bedtime reading, anyone?
- American businesses spend an estimated $147 billion per year filing tax returns. Imagine what the impact on our economy would be if even part of that were spent on capital improvements, employee compensation increases and increased philanthropy.
- American taxpayers (individual and businesses) spend 8.9 billion hours a year complying with IRS tax filing requirements. That’s a lot of missed Little League games, dance recitals and date nights with a spouse.
- Small and closely-held businesses create roughly half of all jobs in the U.S. These are the same businesses that are currently taxed at rates as high as 44.6 percent. One can only imagine what high taxes have done to put some businesses over the edge and into insolvency.
- The U.S. corporate income tax rate is 35 percent. That’s easily 10-15 percent higher than countries we compete with in the industrialized world. The difference is a deterrent to companies having their corporate headquarters in the U.S. and incents the flight of American dollars to other countries.
- The “Death Tax” provisions in the current code taxes families twice on their income – once when it is earned and once when the individual passes away. The Death Tax is extremely harsh on ranchers and farmers and has resulted in long-held family properties being sold and lost to future generations of family members just to pay the tax man.
Have you ever heard anyone defend our current tax system? I haven’t. As a rule, I think most of us feel that filing taxes every year is the federal government’s way of punishing us for working so hard. It’s agony and it is expensive for many of us.
Many economists agree that tax reform is the next step in continuing the current economic growth spurt and for promoting further stock market gains. Tax reform is one of the best ways of increasing middle class wealth because IRAs and 401-k accounts will grow in value. Putting money back in the pockets of the middle class is always a good idea.
Some will quibble about the details of a tax reform plan, and that’s okay. But I think most of us can agree that it is time for reform and time for action. We can do better and need to let our federal officials know that we are counting on them to make tax reform happen.
Michael V. Varney
President & CEO