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NTU Supports H.R. 462, the “Tax Code Termination Act.”
May 2, 2011
The Honorable Bob Goodlatte
Dear Representative Goodlatte:
On behalf of the 362,000 members of the National Taxpayers Union (NTU), I write in strong support of H.R. 462, the “Tax Code Termination Act.” By requiring a “sunset” date for the current Internal Revenue Code, your bill would provide the impetus necessary to create a simper, fairer, and pro-growth Tax Code.
Our current Tax Code is a shockingly complex maze credits, deductions, and exemptions that distort Americans’ behavior in order to serve policymakers’ often-conflicting goals. The result, as reported in NTU’s 2011 Taxing Trend complexity study, is an aggregate paperwork burden that requires 7.64 billion hours to complete, the equivalent of 3.82 million people working full time. This gigantic time-expenditure translates into $227.1 billion, when measured using average private sector hourly compensation costs. From the 1950s until the 1980s the Tax Code was streamlined roughly every 10 years. While incremental changes have been enacted in more recent decades, they have not necessarily served the cause of simplification. It has been 25 years since the last serious attempt at tax reform, and the law has grown more complex and inefficient with each passing year.
By putting a spigot on the stream of taxpayer money flowing into Washington, and by setting a date to shut it off, your bill would provide the structure needed to force Congress to deal with tax reform or face the political consequences of failing to do so. Because sunsetting the Tax Code does not guarantee a better system, your bill provides common-sense principles to guide the reform process. Among the many useful guideposts, your bill stipulates that any reforms apply a simple, low rate to all taxpayers, end the Code as a tool for picking winners and losers, and eliminate the bias against savings and investment. Taken together, these guidelines would create a far superior alternative to the current convoluted and economically inefficient structure.
Fundamental tax reform should be source of bipartisan agreement in an otherwise contentious policy atmosphere. There is unanimous agreement that our labyrinthine Tax Code creates unnecessary time and monetary burdens for individuals and businesses. Comprehensive reform would eliminate these burdens, allowing for lower tax rates as well as economic efficiency that will help all Americans to prosper. For these reasons, NTU endorses the Tax Code Termination Act and any roll call votes on this legislation will be significantly weighted in our annual Rating of Congress.