How to Fix the Absurd U.S. Tax System
Any kind of flat fair simple system would be better than the mess we currently have.
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House Ways and Means Committee Chairman Dave Camp, R-Mich., recently jump-started the tax reform debate. It’s about time. The tax code stables in Washington haven’t been cleaned out since 1986 – more than a quarter century ago, when Ronald Reagan was president.
Since then, year after year, the tax code gets engrafted with more special-interest loopholes, credits and carve-outs. Not only is this unfair to those without lobbyists, it makes the tax code mindlessly complex – a job-security program for tax lawyers and accountants.
Worse yet, back in the 1980s, the United States had among the lowest income tax rates on businesses in the world. Today, our small and large businesses pay among the highest rates.
Our corporate tax rate is now the highest in the industrialized world at 35 percent. Almost all other nations have slashed their business taxes to attract jobs and businesses. This high corporate rate in practice acts as a tariff on the goods and services we produce in the United States. Our analysts at The Heritage Foundation found that this lowers wages of American workers. Want to give U.S. workers a raise? Cut the tax rates on businesses so they invest more here.