Priority #1: Address The Debt Crisis
Guest column submitted by U.S. Senator Mike Crapo
Addressing the debt crisis remains the most pressing issue our nation faces and my number one priority in the 113 th Congress. The debt crisis is much more than just the fiscal cliff or the debt ceiling. It threatens our economic wellbeing and national security. In the midst of this massive crisis are a number of critical opportunities-including opportunities to reform our badly broken tax code; stabilize entitlement programs; establish powerful budget controls; and address our spending problem. We must not miss these opportunities.
The National Taxpayer Advocate, who leads the independent organization within the Internal Revenue Service (IRS) that helps taxpayers resolve IRS-related problems, reported that individuals and businesses spend more than 6 billion hourseach year doing taxes and complying with tax law. The report also noted that the guidance alone for the four-million-wordtax code is more than 1 foot tallwhen printed. The organization reported that the tax code "makes compliance difficult, requiring taxpayers to devote excessive time to preparing and filing their returns" and "requires the significant majority of taxpayers to bear monetary costs to comply." This badly broken tax code must be fixed.
I have long advocated for fixing the structure of income tax, capital gains and dividends tax rates, and to permanently repeal the Alternative Minimum Tax and Estate Tax. On January 1, 2013, every American was hit with large tax increases. If Congress had not passed legislation to avert the fiscal cliff, the average Idaho family would have seen its taxes increase more than $3,000 per year. We have been fighting for over 10 years to protect and make permanent reduced tax rates, and we were successful in protecting 99 percent of Americans from this tax increase. Importantly, we made these tax cuts permanent. While some progress has now been made in obtaining long term tax relief, the code is still unacceptably complex, expensive to comply with, unfair and anticompetitive to American business interests.
We must immediately work to enact pro-growth tax reform, which would simplify the tax code for all Americans, grow our economy and make American business more competitive. We should reduce our corporate and individual tax rates, which are paid by many small businesses. More than $1.1 trillion in increased tax revenue is projected over the next ten years, which will be felt throughout the income spectrum, although heavily weighted toward upper income American families and small businesses. The bipartisan Bowles-Simpson Commission called for taking the corporate tax rate and the top individual tax rate as low as 23 percent, and no higher than 29 percent. Congressional efforts should work toward those goals, along with transitioning to a competitive territorial corporate tax system that will significantly strengthen our international competitiveness.
We must dramatically simplify our tax code, eliminating complexity, favoritism and loopholes, broadening the base and significantly lowering the rates. In addition to producing a much more simple and streamlined code, a byproduct of this kind of pro-growth tax reform will be increased economic and job growth, and therefore, increased revenue and strengthened competiveness.
As a member of the Senate Budget and Finance Committees and through my work with the bipartisan group known as the Gang of Eight, I will continue to work for a comprehensive solution to our debt crisis that includes comprehensive tax reform that would lower all tax rates, simplify the tax code and reform our corporate tax code to make U.S. businesses more competitive. I will be discussing the other key pieces of the solution, including securing important entitlement programs and strengthening budget enforcement tools, along with other priorities in this Congress in upcoming columns.
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