Recent studies have shown that the average American spends nearly 17 hours preparing to file their taxes because our nation’s tax code is so complicated. We last reformed the tax code in 1986, and it’s high time for an update.
In the coming weeks and months, Congress has a historic opportunity to revamp the nation’s broken and outdated tax code. This process began with an outline from the White House, the Senate, and the House of Representatives laying out the guiding principles for debate. The goals of the framework are two-fold: keep taxes fair and simple at home and make America more competitive.
Above all, the goal is to lower the tax rates for individuals and middle-class families. It also recommends doubling the standard deduction. This means more money back in the pockets of hardworking Americans in Nebraska and across this country.
A better tax code is one that’s easier to understand. The tax reform framework recommends consolidating the number of tax brackets from seven to three. With this simple change, more Americans will be able to complete their taxes on their own without wasting time and money filling out seemingly endless paperwork.
We also need to lower taxes on small and family-owned businesses, the backbone of America’s economy. The tax reform framework makes doing so a priority. It limits the maximum rate for our small businesses to 25 percent, a rate significantly lower than what these businesses are currently paying today. A lower rate will give our small businesses more breathing room to grow, invest, and create jobs.
Another burden currently on America’s family-owned businesses is the death tax. For so many Nebraskans, their work and legacy is passing down their business from generation to generation. The death tax makes doing so unnecessarily difficult. This double taxation is not right and it’s not fair. It forces rising small business owners to pay the government before they can take full possession of the land or business their family already owns. Because the wealth of these businesses is often in the form of land or equipment, the children inheriting the businesses often need to sell parts of the business their family spent generations building in order to pay this misguided tax. Through tax reform, I’m hopeful we can repeal the death tax and keep Nebraska’s proud tradition of family-owned businesses alive.
Everyone wants America’s businesses to be able to grow and thrive, but right now, our corporate tax code is hurting our competitive edge. Tax reform gives us an opportunity to level the playing field and promote American competitiveness in our global economy. One way to do this is by lowering the corporate tax rate. Right now, America’s corporate tax rate is 35 percent, the highest among our trading partners, and it’s a major reason businesses are keeping money in accounts overseas. Reducing this corporate rate will encourage companies to bring that money back to the U.S. and invest it here at home. It will also empower American entrepreneurs to start and grow new businesses.
Now that congressional leaders have unveiled a tax reform framework, the Senate Finance Committee and the House Ways and Means Committee will begin drafting tax reform legislation. Although the legislative process is just beginning, tax reform is the single most important action we can take to spur economic growth in this country. I’m ready to get to work.
Thank you for taking part in our democratic process. I look forward to visiting with you again next week.