The actual law for the income tax is 3,387 pages. The IRS has a total of 13,458 pages of regulations to implement the income tax, using 865 different forms and 321 instruction pamphlets. Other countries must think we’re crazy.
We need fundamental tax reform—and I have a plan that’s simpler, fairer, broader and lower.
By global standards, the United States has one of the most complex tax codes in the world. The current system obviously undermines our confidence, and undermines our competitiveness, as American businesses tangle with an ever-growing sprawl of red tax tape.
Yet, the response provided by the White House and Senate Democrats like Dianne Feinstein is that we need MORE. More taxes, more regulations, and more convoluted laws that don’t do anything but ensure that you and I lose more of our financial freedom.
For example, Dianne Feinstein joined her fellow Democrats in voting for the “Buffett Rule.” The Buffett Rule is a political gimmick. It promotes “fairness” by making an unfair comparison between income taxes and capital gains taxes. It also distracts from the truth that capital investment is actually taxed at least four separate times under our tax code.
- It’s taxed first by America’s uncompetitive corporate income tax, which is now highest in the world.
- If it’s paid out as dividends, then it is taxed again by the individual income tax.
- If the value of the capital interest increases, then it is taxed again by the capital gains tax.
- If there’s any left at the investor’s death, then it’s subject to taxation again by the death tax.
It’s no wonder that it seems like the only ones investing in America are the Chinese.
The President himself admits that the “Buffett Rule” is a “gimmick.” It has no impact on the economy whatsoever. Here’s how absurd it is: columnist Mark Steyn wrote that with the revenue from the “Buffet Rule”, it will take 514 years to pay off the deficit from 2011 alone. If we follow the “Buffett Plan,” it will take Senator Feinstein until 2056 just to pay off what she’s overspent in the last year.
But that didn’t stop Dianne Feinstein from voting in favor of it, even though the Democrats admit it doesn’t create jobs, balance the budget, or solve our out-of-control debt crisis, of which Senator Feinstein is responsible for $6.5 trillion since the last time she faced California voters.
Opposing the “Buffett Rule” is not about protecting millionaires. We shouldn’t raise taxes on anyone–not while the federal government is spending money faster than it can print it. Singling out one group of people to raise their taxes is just one example of how Senator Feinstein’s trying to divide our country at a time we need to find common ground.
By favoring certain economic activities over others, the tax code distorts financial decisions and reduces economic efficiency. We need a reformed income tax system for this country that is simpler, more broadly based and therefore fairer to all and specifically designed to stimulate our economy by lowering taxes on investment and job creation.
The single most effective action to clean up special interests in Washington would be to scrap the existing tax code and replace it with a fair and simple one. Here’s what I propose:
- Simplify the tax code and make it flatter and fairer.
- Broaden the tax base by repealing loopholes and shelters.
- Make the 2001 tax cuts and the death tax repeal permanent.
- Reduce the corporate tax rate to make it competitive.
- Provide strong incentives to repatriate foreign earnings by adopting a territorial tax system.
- Create a domestic system that encourages savings and investment in America.
There isn’t an American business owner who looks at their business and thinks, “I’m not hiring another worker until Congress passes a tax hike.”
The tax code reduces incomes through punitive taxes on saving, work, and entrepreneurship. It places multiple layers of taxation on saving, thus reducing investments in new machines and technology that make American workers more efficient and competitive.
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