Whether you filed your taxes weeks ago or sought an extension at the last minute, no Hoosier looks forward to Tax Day.
The Internal Revenue Service estimates Americans across the country spent more than 6 billion hours and roughly $194 billion to prepare and file their taxes.
The tax code is a tangled web of exemptions, deductions, credits and other special-interest preferences that costs families and businesses valuable time and resources.
Rather than benefiting our economy, the current tax system is an anchor dragging down economic growth and stifling job creation.
Its time we lift that anchor and reform our outdated tax code to make it work better for families and businesses.
Some critics argue that Washington is too politically divided to tackle something as large as comprehensive tax reform.
I argue that it has been done before and we can do it again.
More than 25 years ago, President Ronald Reagan teamed up with then-Speaker of the House, Democrat Tip ONeill, along with former Republican Congressman Jack Kemp and former Democratic Senator Bill Bradley to pass sweeping comprehensive tax-reform legislation. These leaders created sound fiscal policy that generated 6.3 million new jobs in the first two years of enactment.
That is what we need from leaders in Washington today.
Since I returned to the Senate last year, I have urged Congress and the administration to heed the lessons of Reagan and ONeill. Both political parties agree that our tax code is a mess and in need of restructuring. Yet when it comes to producing legislation, both parties have returned to their respective corners, resulting in an ongoing stalemate.
Rewriting and simplifying the 3.8 million words in the U.S. Tax Code will require support from both Republicans and Democrats.
That is why Sen. Ron Wyden (D-Ore.) and I have introduced a comprehensive tax reform bill that will encourage investment here at home and create more American jobs. A Democrat from the West Coast and a conservative Republican from the Midwest joining forces to produce major tax legislation proves there is an appetite for bipartisan action on this issue. The Wyden-Coats plan will make the tax system more simple, more fair and more competitive for Hoosier families and businesses.
Under our bill, the number of individual tax brackets will be reduced from the current six to three and the Alternative Minimum Tax will be eliminated.
Middle-class and low-income taxpayers will benefit from Wyden-Coats near tripling of the standard tax deduction. This will not only reduce tax bills but relieve Indiana families of the stress of maintaining the records and receipts needed to document itemized deductions. These simplifications alone will make it possible for most Hoosiers to complete their taxes in less than one hour and on one page.
The Wyden-Coats plan also benefits our nations job creators. In todays global marketplace, the average corporate tax rate amongst our countrys trading partners is 25 percent. On April 1, Japan lowered its corporate tax rate by 5 percent, making Americas combined corporate tax rate of 39.2 percent the highest in the world.
The United States is a world leader in many ways, but topping the charts with the highest business tax rate is nothing to celebrate. Our high corporate rate handcuffs businesses, resulting in fewer jobs, reduced wages and increased costs for consumers. The Wyden-Coats bill replaces the existing six corporate tax rates and eight brackets with a single flat rate of 24 percent.
By reducing our corporate tax rate, our plan will unlock Americas competitiveness and attract companies to invest in the United States rather than ship jobs overseas.
Washingtons spend-tax-and borrow mentality is doing nothing to eliminate the more than $15 trillion of red ink on our books. The answer to our revenue and debt problem is not more taxation. The answer is tax reform. When more Americans are working, more people are paying taxes; and when more taxes are being paid, more debt can be wiped off our books. Simplifying and reforming the tax system is a proven way to jumpstart the economy and reduce debt.