When it comes to modernizing and simplifying our nation’s archaic tax codes and reducing tax burdens on citizens’ businesses, it seems that “perfect” may be getting in the way of “very good.” This is a common theme in Washington and one of the reasons why most of us see Congress as never getting anything done. But cutting taxes and simplifying the code also seems like a no-brainer to those of us who walk Main Street in cities and towns across our country. This plan will reduce taxes on employers — and that helps everyone.
Our tax code was last changed in 1986. That’s 31 years ago. The current tax code has grown to more than 74,000 pages, and it is so complex that American businesses spend an estimated $147 billion per year filing tax returns. American taxpayers (individual and businesses) spend
8.9 billion hours a year complying with IRS tax filing requirements.
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, bringing some of those businesses to the brink of 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. Money, just like people, goes where it is welcomed.
In short, it is unquestionable that our current tax code is penalizing job creators—and I would know. Tucson Metro Chamber represents 1,500 businesses employing more than 160,000 employees in Tucson and Pima County. Small businesses make up approximately 60 percent of chamber membership.
As president and CEO of the Tucson Metro Chamber, I have never heard anyone defend our current tax system. Most of us agonize with it in the weeks leading up to April 15. The universal disdain for the current system is reason enough to cheer on the reformers.
Many economists agree that tax reform is the next step in continuing the current economic growth and for promoting further stock market gains. Tax reform is one of the best ways of increasing middle class wealth because IRAs and 401K accounts will grow in value. Putting money back in the pockets of hard working families is always a good idea.
Some will quibble about the details of a tax reform plan, and that’s OK. But I think most of us can agree that it is time for reform and time for action — and this is our shot.
We can do better and need to let our federal officials know that we are counting on them to make these tax cuts happen. Recent meetings with Congresswoman Martha McSally and her constituents give us hope this tax cut plan can and will move through the legislative process.
— Michael Varney is president and CEO of the Tucson Metro Chamber of Commerce
The views expressed in guest commentaries are those of the author and are not the views of the Arizona Capitol Times.