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The big picture on tax reform
Today, our nation stands at an impasse. Our tax code is overly-burdensome and has put America at a major disadvantage in an increasingly global marketplace. Unfortunately, the ones that feel the pain of this outdated system the most are hardworking Americans. That is why the time is now for Congress to reform our nation's tax code. True tax reform would energize our economy. The current tax code is convoluted, complex, and picks winners and losers-creating a system that is hardly fair, simple, or effective.
I have proudly introduced my flat tax proposal, the "Simplified, Manageable, and Responsible Tax (SMART) Act," in every Congress since being elected to the Senate to establish a flat income tax of 17 percent on all incomes. This legislation would create jobs, provide an immediate tax cut for many Americans, and reduce IRS paperwork to the size of a postcard. However, short of my SMART Act proposal, I believe in a few guiding principles that Congress should follow when considering comprehensive tax reform.
First, think big. It has been over thirty years since Congress has approved a comprehensive tax measure. During that time, our economy and the technology surrounding it has fundamentally changed. Our nation needs a tax code that keeps the American marketplace competitive on the global stage. However, tax reform must take into account all types of individuals and businesses. A tax reform package that only lowers the rate for large corporations will fail to truly impact the lives of everyday Americans.
We must ensure that small businesses, the lifeblood of the American economy, are included in any tax reform proposal. These companies are responsible for approximately sixty-five percent of net new private-sector jobs in the United States. If tax reform does not provide relief for small businesses, the tax code will not generate an even playing field for all.
Additionally, families must be relieved of their tax burden. Too often, breadwinners struggle to provide necessary goods for their families. Tax relief will not only create conditions that allow families the opportunity to succeed, but will also provide more disposable income that can be reinvested into our economy. Congress should evaluate proposals to see how they will impact everyday earners who work to give their families better lives.
Congress must also ensure that the tax code is simplified. Studies have indicated that Americans spend more than 6 billion hours per year on their taxes. A simplified tax code will help all Americans, especially those who often struggle with the ever-increasing strain and complexity of filing taxes.
The upcoming debate in Congress on tax reform is sure to be robust and heated. Many special interests have carved their own niche in the current code and will not willingly relinquish their benefits. Nonetheless, Congress must look to the bigger picture when making these important decisions. Simply put, lower rates for all will allow the economy to flourish, grow, and most importantly become more competitive. The time is now for Congress to enact comprehensive tax reform.
Shelby is the senior senator from Alabama.