As another Tax Day has come and gone, we reflect upon what’s wrong with our tax system and what can be done to fix it. The President’s idea is to use the tax system as a way of dividing classes by income as he did with the Buffett Rule proposal. He knew it was a gimmick, yet he spent days of taxpayer dollars trying to ram through his proposal. Luckily, it was defeated in the Senate earlier this week.
The problem is that an individual tax code with 3.8 million words is too complicated for the average American to understand. We have a corporate tax code – at almost 40 percent when you add federal and state taxes together – that makes America hopelessly uncompetitive. And our tax code contains loopholes that are exploited by companies large enough to hire an army of lawyers.
As Investor’s Business Daily wrote, in 1981 the entire developed world had high corporate tax rates, averaging 47 percent. Then capital became mobile and rates plummeted to 25 percent and haven’t stopped falling. The United States remains stuck since 1986 in an out-of-date, high corporate tax rate, which sent companies fleeing America for a more competitive tax climate. Just ask any number of companies why they left America and they’ll tell you that between the high tax and unreasonable regulatory burden in America, other nations are now a more profitable place to do business. And this problem will only get worse at the end of this year when the current tax cuts may expire at the will of President Obama. Billions more in investment will flee our shores for other countries.
We need a tax system that forces large, well-connected corporations to play by the same rules as small businesses and individual Americans and that protects and provides fair competition in free markets.
In the 1980’s Ronald Reagan enacted tax reform that created a period of unparalleled prosperity. We should follow his blueprint for tax reform that had as its core principle to stop taxing investment and productivity.
First, it is only fair that everyone should contribute something to the core government services like national defense, our courts, our roads and necessary infrastructure--our public goods. Everyone benefits and everyone needs to pay something.
Let’s face it: freedom is not free and all of us benefit from it. Today we live in a world where only 53 percent of Americans pay federal income tax. That means 47 percent pay nothing. People who pay nothing can easily forget the idea that there is no such thing as a free lunch.
Second, even though everyone should pay something, those who can afford to pay more should pay more. This is true not just in absolute terms. Someone at a higher income level should pay at least the same percentage of income as someone at a lower income level. In other words, a flat tax should at least be flat, and not tilted against lower and middle income families.
Third, fairness also demands that government limit its claim on the hard work and talents of the people it taxes. The income people earn is not the government’s income; it belongs to the people who earned it. When people in Washington say things like “we can’t afford a tax cut,” they need to think about whom the “we” is. It is the people’s money, not the politicians’ money.
When you say that government has first claim on the income earned through people’s work and creativity like President Obama has, you are not far from saying that the people themselves belong to the government.
The fundamental principle of a flatter tax system should be to level the playing field for all people and all businesses. We need a national discussion on tax reform rather than gimmicks. Only then can we make our system fair for all Americans.
From the Great Compromise of 1787 to the Compromise of 1850, compromises are etched into our nation’s history. Unfortunately, President Obama’s recent “compromise” with our nation’s religious employers is not a compromise at all.
On January 20, when the Obama Administration announced a new Obamacare mandate requiring religious employers to provide free contraceptives to their employees, there was an outcry across the nation. Why would the President ever ask religious Americans to violate their moral conscience by forcing them to provide abortifacients, or pills that cause abortions? Since that announcement, churches have been staking their ground against the President’s decision. Thousands of Roman Catholic priests and bishops read their congregations a stirring and thought provoking letter during Sunday Mass Services. Countless news programs revolved around this controversial Obamacare provision. Many pundits wondered why a President up for re-election in November would make such a damaging political move.
In light of this controversy, it came as no surprise when President Obama announced he would compromise on this mandate. Before his announcement this past Friday, many Americans were hopeful that the Chief Executive would relent and allow religious employers to provide their own health insurance, free of the contraceptive mandate. Yet amazingly, the President took to the podium and offered a revised version of exactly the same plan!
The President provided the following compromise:
“Under the rule, women will still have access to free preventive care that includes contraceptive services — no matter where they work. So that core principle remains. But if a woman’s employer is a charity or a hospital that has a religious objection to providing contraceptive services as part of their health plan, the insurance company — not the hospital, not the charity — will be required to reach out and offer the woman contraceptive care free of charge, without co-pays and without hassles.”
In other words, though the religious employers would no longer be forced to offer free contraceptives to their employees, they will still be required to provide insurance plans to their employees that will provide them with free contraceptives. This is deception. This is not a compromise.
In fact, I would be interested to know in what way the President actually compromised his original mandate at all. According to Webster’s Dictionary, the very definition of compromise is “a settlement of differences by mutual concessions.” Because if religious employers are still forced to provide insurance that gives their employees access to free contraceptives, in what way has the President actually conceded his original plan? The sad truth is that he is still asking many American employers to violate their moral conscience on a daily basis. No healthcare plan should force Americans to go against their deeply held religious beliefs. This horrendous mandate is just one of the many reasons that I will not rest until Obamacare is repealed.
When the American people bestowed the highest office in the land onto President Barack Obama three years ago, they did so trusting him to follow through on his promise of “hope and change.” He has not kept that promise. The supposed accomplishments the President presented in Tuesday night’s State of the Union only serve to divert America’s attention from the true state of the union. Under three years of an Obama administration, our country is suffering; millions linger without a job, gas prices have nearly doubled, and our national debt is greater than the value of the entire U.S. economy.
Though he tried to do so, President Obama cannot blame the sad reality of our nation’s state on the inaction of Congress or the ineptitude of his Presidential predecessors. After all, it was President Obama, not Congress, who asked for nearly $5 trillion dollars to be added to the national debt. It was President Obama who recently cancelled the Keystone Pipeline project, killing thousands of potential American jobs. Under President Obama the unemployment rate has risen from 6.8% when he was elected to today’s 8.5%, a reality that’s caused many Americans to simply stop looking for work. Unfortunately, the unemployment rate is not the only figure that has seen an upsurge under this Administration – gas prices have nearly doubled from the day the President took office to now. When you compare that to only a 28-cent gas price increase under the last President’s administration, it is truly disheartening.
I agreed with the President when he called for all Americans to reclaim their “American values.” But, contrary to the President’s beliefs, the time-tested values that made America great do not include redistribution of wealth or lack of incentive to prosper. In reality, our country was founded by Americans who believed in values such as hard work and determination. They believed strongly in “life, liberty and the pursuit of happiness.” None of them believed in taking away from their neighbors to achieve their dreams, but instead worked hard to provide for their own families and carve out a home in America for the generations to come.
Yet there is still hope for our nation. There is hope because we are the descendants of these hard working Americans. The same values that inspired them to greatness inspire us today. We don’t need handouts or bailouts, we need incentive and inspiration. As a member of Congress, I will continue to fight everyday to preserve and promote these true American values.
“In the late 1990s, there were typically fewer than a dozen tax provisions that had just a limited lease on life and needed to be renewed every year or so.Our founding fathers never intended a larger-than-life government manipulating our very economy via the tax code. We can start to reverse this course by focusing on pro-growth measures that will provide needed certainty to businesses and families. The 112thCongress should consider cutting the corporate tax rate to make it more attractive for businesses seeking to operate in the industrialized world. I would also like to see the zeroing out of capital gains taxes. Then, let’s reduce all marginal personal income tax rates for individuals and start debate on ending the death tax. Better yet, given our nation’s dire economic situation, let’s begin a serious discussion about whether or not to scrap the current tax code and replace it with a fairer, flatter tax code. I think Americans would appreciate slashing the tax code to a fraction of its current length of more than 50,000 pages.
“Today there are 141.
“Now Congress, taking up a deal worked out between the Obama administration and Republican leaders, is poised to turn the whole personal income-tax system into something of a temporary structure. The plan embraces a broad range of provisions—an extension of Bush-era rates, a new estate-tax formula—but for only two years. A payroll-tax cut in the bill is for a single year.
“This means that if the compromise passes largely intact, the U.S. will have no permanent regime governing levies on salaries, capital gains and dividends, the Social Security tax, as well as a slew of targeted breaks for families, students and other groups. This on top of dozens of corporate-tax provisions that already were subject to annual renewal.
“The level of uncertainty, unusual for developed nations, complicates planning and discourages hiring and investment, many economists and corporate executives say.”
BREAKING: Senate Judiciary Committee Approves Gang of Eight Immigration Reform Bill | Daniel Doherty