Pondering the complexity of the tax code on Tax Day

Pondering the complexity of the tax code on Tax Day
By SCOTT GARRETT

As you finalize this year’s tax returns, I hope you realize you are not the only one feeling frustrated. In fact, Albert Einstein once quipped that “The hardest thing in the world to understand is the income tax.” Interestingly, this wasn’t always the case.

In 1913, the tax code was a far more manageable 400 pages. When Einstein passed away in 1955, the U.S. tax code had grown to about 14,000 pages — 10 times as long as the novel “War and Peace.”

Today, now eclipsing 74,000 pages, the code is more than five times as large as it was in Einstein’s time. For those of you doing the math that means since its adoption in 1913, policymakers have added an average of two new pages to the code every day for the last 100 years.

Besides causing a headache for you, your loved ones and your neighbors, the complicated tax code is a colossal drag on our nation’s economy. According to a 2013 report published by Mercatus Center scholar Jason Fichtner, “Americans spent more than 6 billion hours complying with the tax code in 2011.” He writes, “The compliance burden results in estimates of foregone economic growth from $148 billion to $609 billion annually.”

A simpler, fairer and flatter tax structure is the solution to this problem. It is time for us to simplify every Americans’ tax filing, saving time and hard-earned money, and creating much-needed certainty for job creators and small business owners.

Before the House Ways and Means Committee last April, Sam Griffith, president and chief executive officer of National Jet Co., said “the current tax code is a maze of mismatched provisions which provide disincentives to grow our businesses and hire new employees.” The 2013 Small Business Survey compiled by the U.S. Chamber of Commerce has found that eight out of 10 small businesses support reforming the tax code.

State tax policy is a good, small-scale example of what can happen on the federal level. The governors of Texas, Wisconsin and Indiana, for example, have openly and actively recruited out-of-state businesses to relocate and enjoy their states’ lower taxes and less burdensome regulations. It’s time for the federal government to follow suit.

Just like the states near Wisconsin, Texas, and Indiana, the United States loses business to other countries because of our high, overly complex tax code. But, rather than working to enact across-the-board reform, our policymakers just insert exemptions or “carve-outs” for politically favored businesses.

These tax carve-outs are unfair to Main Street coffee shops, florists, local factories and any business that doesn’t get the same kind of treatment. As we know, when the government picks winners and losers, we end up with stories like that of Flabeg Solar U.S. Corp. — the failed solar energy company that cost the American taxpayers more than $10 million.

Americans want to be treated fairly and they want to earn a living to support their families. The tax code is crying out for significant, substantive reform. Meaningful, structural reform will free up Americans’ time and money so they can put it into greater creativity and productivity.

With comprehensive tax reform, we have a chance to reignite the entrepreneurial, hardworking American spirit that is being stifled by mountains of antiquated tax policies that no one — even a world-renowned physicist — can understand.

U.S. Rep. Scott Garrett represents the 5th Congressional District of New Jersey, which includes most of Warren County.