One of the most successful legislative victories became law thirty-one years ago this month. On October 22, 1986 President Ronald Reagan signed the Tax Reform Act of 1986 into law. The historic legislation was the broadest revision of the federal income tax in history. President Reagan simplified the code, eliminated an array of tax breaks and tax havens, and drastically reduced rates across the board. In just ten days the thirty-first anniversary of that historic day will be upon us, as our current Congress continues to craft their own tax reform bill.
Congress has made thousands upon thousands of changes to the original code, and as a result the current tax reform efforts face problems eerily similar to those that Reagan fought to overcome. In the ten days between now the 31st anniversary of the 1986 Tax Reform Act, here are ten reasons why we need tax reform:
1) Time: 2.6 billion hours are spent by taxpayers each year complying with IRS requirements;
2) Wages: Reform will allow for higher wages for Americans;
3) Economy: 3% growth in the economy will provide relief for many, and opportunities for all;
4) Length: A shortened code helps small businesses and taxpayers, 2.4 million words is too long
5) Competitiveness: American companies should be able to lead globally, instead of being at a disadvantage among other nations
6) Compliance: By simplifying the code, Americans won’t have to spend $99 billion a year to comply with the complicated code
7) Overseas: By creating a simpler code for all Americans, $2 trillion a year won’t have to be stashed in overseas bank accounts
8) Jobs: When businesses are pushed overseas due to our tax code, jobs and money go along with them
9) Rate: Due to the nearly 40% in taxes businesses pay, American businesses are forced to increase prices for consumers and don’t have the opportunity to invest in the economy;
10) Outdated: Due to the complicated code, businesses of all sizes are unable to compete in the global market;
Follow us on Twitter as we count down to tax reform’s 31st anniversary with daily reminders of why tax reform is important to everyone. The tax code may be too complex, but reasons for reforming it are simple: our slow economic growth needs the boost that tax reform brings, our businesses shouldn’t have their competitiveness impaired by our high rates and our outdated system. American taxpayers deserve to keep more of their own hard earned money.