On Thursday, the House Ways and Means Committee hosted its first hearing of the 112th Congress on tax reform. This was the first in a series of tax reform hearings examining the economic and administrative burdens imposed by the current structure of the federal income tax.
The House Ways and Means Committee designed these hearings to explore the cost of complexity borne by American families, the cost of a corporate tax system that is increasingly out of step with the rest of the world, and the broader cost to the U.S. economy of a tax system that fails to maximize job creation and impedes economic growth.
Under our current tax system, the tax compliance costs relative to the amount of tax paid are reason enough for rejecting it. The Internal Revenue Service estimates that Americans spend 6.6 billion hours per year filling out tax forms — including 1.6 billion hours on the 1040 form alone. Back in 2002, Americans spent an estimated $194 billion on tax compliance, which amounts to 20 cents of compliance cost for every dollar collected by the tax system.
According to research done by the Tax Foundation, the projected total income tax compliance costs in 2011 will be $391.9 billion, which is more than 20 percent of the total federal revenue. Americans bear an enormous cost to comply with the 67,000 pages of complex tax code. The IRS portion of the U.S. Tax Code — known as Title 26 — alone contains more than 3,600 pages of rules and regulations. Let’s compare this number with House Resolution 25, the 131-page FairTax legislation. In an age when Americans are calling for simplicity, the FairTax provides a transparent and fair answer.
Obviously, I am pleased about these hearings as they are not only an acknowledgement of our nation’s broken tax code, but a productive step toward serious reform. The bedrock of the FairTax is the understanding that our current income tax system is unsound. I will work diligently to ensure that the FairTax — the most widely supported piece of tax reform legislation in Congress — will have a place in the coming Ways and Means discussions.
I welcome the prospect of testifying before the committee in future hearings on the myriad ways the FairTax will solve our tax code woes. The fact of the matter is that our tax code needs more than nips and tucks — it needs an overhaul. This is why I am so pleased that Rep. Tom Price, a fellow Georgian and lead co-sponsor of H.R. 25, sits on the Ways and Means Committee and is fighting for the tax reform that our nation so desperately needs.
Americans deserve relief from the tax and compliance burden, and these tax hearings are just one step closer to seeing tax reform become a reality. All Americans have the responsibility to make their needs known to their representatives. If last November taught us anything, it is that the American people are still in control of their House. Remind your friends, family and neighbors that their voice matters and to let their leadership know that freedom from our nation’s oppressive tax code comes with the FairTax.
Rob Woodall is the U.S. Representative for the 7th District of Georgia. Visit his website at http://woodall.house.gov.