TAX SIMPLIFICATION

Fair and Forward-Thinking Policy

We can’t avoid paying taxes, but we can certainly move away from the inflammatory rhetoric and name calling that this issue seems to continually generate in Washington, D.C.

I believe if fair and forward-thinking compromise can be reached, the simplification of our tax system could be the key to revitalizing our economy and growing jobs again. But first, we need some honest dialogue.

Our federal tax system is broken. A dizzying number of credits, deductions, and loopholes have created a maze where people spend money on things designed to avoid taxes rather than generate economic growth. In fact, a congressional committee found that in 2009 there was a near 80% increase in filers claiming over $200,000 in annual income who paid no federal income tax due to an aggressive use of credits, deductions and loopholes. As a result, 51% of federal tax filers paid zero federal income tax. A majority of Americans who don’t pay any income tax? How can any reasonable person see that as a sustainable trend?

And it’s not just individuals. General Electric deployed an army of lobbyists and tax attorneys in a tax avoidance scheme that became a profit center for their corporation. In 2010, GE generated $14.1 billion in revenue worldwide and had zero tax liability. In fact, the company enjoyed $3.2 billion in tax benefits.

Who gets stuck paying a full tax bill? People like you and me, and small and medium-sized companies like the ones in Oregon that don’t have tens of millions of dollars to stuff the tax code with special interest perks. If General Electric pays some taxes because of tax reform is that considered a tax increase? Please. Any defense of a tax code that only benefits big, lawyer-rich corporations is silly and standing in the way of job creation for small businesses in the First Congressional District.

At the same time, tax reform can’t be used as code for “raising taxes.” Many have suggested that we can fix an annual federal deficit of $1.3 trillion by simply getting rid of depreciation rules for “corporate jets.” This divisive way of targeting certain industries is yet another assault on intellectual honesty. While it may earn politicians political points, and yes, we need to get rid of unfair tax breaks, such changes would generate less than $1 billion in savings per year. Meanwhile, we’re $14 trillion in debt. Can we get serious?

To borrow a phrase, we don’t need more taxes we need more taxpayers. We do that by simplifying the tax code. It should not be a system that benefits only those with political connections. It cannot be a way for politicians to raise taxes or for corporations to avoid them. It should be straightforward, stable, and designed to fund government while leaving as much money as possible in private hands.

There can be no argument that in this stalled economy investors, entrepreneurs and employers need a predictable and simpler tax code in order to plan and hire. I support eliminating hundreds of loopholes that encourage tax avoidance behavior and lowering rates to encourage job-producing activities. The tax code drives too many decisions, meaning individuals and companies are allocating resources based on a tax avoidance benefit rather than a job creation benefit.

We will never fix our budget deficit problem unless we grow the economy, which will create more taxpayers. It is estimated that businesses are holding nearly $2 trillion in cash reserves right now because they are uncertain about the tax and regulatory future. We don’t need to spend more government money in a failed pursuit of job creation. What we need to do is reform the tax code so that employers are willing to put that money to work here in Oregon and throughout the United States

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