If you felt a growing sense of dread as you prepared to file your taxes this year, you’re not alone. According to a survey by Harris Poll, almost seven-in-ten people are worried they may not be filing their taxes correctly.
Your concerns are valid—the American tax code is one of the most complex and unfair in the developed world. The instructions the IRS provides for filling out form 1040, one of the most commonly-used tax forms, are over 100 pages long. The federal tax code itself is over 70,000 pages long, and both federal and state taxes are packed full of special exemptions and carveouts.
Tax reform in America is long overdue and desperately needed. It’s been three decades since lawmakers passed the last major overhaul, and in the years following the tax code has become a complicated, frustrating mess.
The average American spends 13 hours and around $210 to file their taxes. Nearly one in three pays a tax preparer to sort through the piles of paperwork and tell them how much they owe the federal government. The tax preparation industry employs over 300,000 people, and in 2012 generated $9 billion in revenue.
Most Americans have spent the last year overpaying the federal government, so over seventy percent end up being owed a refund. Last year, the average refund was almost $3,000. Even once you’ve submitted your taxes, there’s no guarantee everything was filled out correctly. There’s always the fear that you’ll open your mailbox to find out you’re being audited months or even years after filing.
All of this complexity is just for income taxes. It’s even more of a headache if you own a small business, have investments, or receive an inheritance. For businesses, the corporate tax rate puts companies at a gross disadvantage in today’s global economy.
It doesn’t have to be this way. Lawmakers have a once-in-a-generation chance to implement real tax reform that lowers rates, protects consumers from new tax increases, closes loopholes, and simplifies the tax code for everyone. Doing so will unleash economic growth and give every American the opportunity to pursue their dreams.
Tax reform without any new taxes on American families is possible— if lawmakers are willing to put responsible budgeting first. We’ve made some suggestions on how they can do it—check it out here.