The November jobs report, which showed nearly twice as many Americans dropped out of the labor force than found work, underscored the deep and systemic problems still affecting the economy. One of those areas is our outdated tax code. Over the years, it has grown too complicated and cumbersome, and it is fundamentally unfair. There are many drivers of our sluggish economy, but we never will recover the jobs lost during the recession unless we undertake comprehensive tax reform.
To simplify the tax code and grow our economy, we should eliminate tax preferences and reduce the overall tax rate for businesses and individuals, including small business owners. Doing so would make the tax code flatter, fairer, and simpler. Commonsense changes to the tax code will lessen the burden on families, ensure everyone pays their fair share, and create jobs by making America more competitive. The resulting economic expansion also would help us address our massive debt, which recently exceeded $15 trillion. With businesses growing and more Americans earning a paycheck, tax revenues would increase the long term.
Comprehensive tax reform also would provide Nebraska families and businesses with certainty. The number of short-term provisions which are adjusted year-to-year has skyrocketed, making long-term planning almost impossible. More than 200 federal tax provisions are scheduled to expire between 2010 and 2020, whereas in 1998 there were only 50 such expiring provisions. An example of this is the current estate tax, which will jump to 55 percent in 2013. This tax disproportionately affects small businesses and producers, and the additional uncertainty puts the next generation of Nebraska business owners, family farms, and entrepreneurs at a further disadvantage.
Making short-term fixes in exchange for long-term flawed policy is not tax reform, nor is it acceptable to continue down the path of adding carve-outs and loopholes. History has shown broadening the base while reducing rates spurs the economy since these policies put taxpayers first - not the government. Tax reforms passed by Presidents Kennedy and Reagan were some of the most sweeping reforms in American history and were significant drivers of economic growth. Independent economists estimate, when coupled with reduced federal spending, comprehensive tax reform could lead to the creation of 1 million jobs in the first year alone.
Conventional wisdom remains to think Congress cannot pass significant tax reform, but now is not the time to think small and shy away from addressing our nation's biggest problems. Democrats and Republicans may not agree on everything, but both parties agree our tax code needs fixing. My work on the Committee on Ways and Means, which has jurisdiction over the tax code, gives Nebraskans a front row seat as we work to put together a vision for pro-growth, comprehensive tax reform.
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