weather icon Clear
RJ App
Vegas News, Alerts, ePaper

EDITORIAL: Tax day a good time to ponder the need for reform

Tax Day looms on Tuesday. Millions of Americans are once again laboring over their tax forms and lamenting how much they owe Uncle Sam.

According to the Tax Foundation, an independent tax policy research organization, Americans will pay $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes this year, amounting to a total bill of nearly $5 trillion — or 31 percent of the nation’s total income. Translation: the government lays claim to almost one-third of all the wealth generated in the private sector. Americans pay more in taxes than what they spend on food, clothing and housing, combined.

In order to illustrate the size of America’s tax burden, the foundation created Tax Freedom Day. The day represents how long the nation has to collectively work each year in order to pay its tax bill. This year, Tax Freedom Day falls on April 24, the 114th day of the year.

This year’s Tax Freedom Day is one day earlier than last year, and considerably earlier than the latest-ever observance on May 1, 2000, when taxes gobbled up 33 percent of our total income. As the foundation points out, however, a century earlier — in 1900 — Tax Freedom Day fell on January 22, as Americans paid a mere 5.9 percent of their income in taxes.

Progressives love to throw around amorphous terms such as “fair share” when talking tax policy. So it’s worth noting that, according to the most recent IRS data available, the top 1 percent of earners in the United States pay 39.5 percent of all federal income taxes. The top 10 percent pay 71 percent, and the top 50 percent pay 97 percent.

On the flip side, not only do the bottom 50 percent pay just 2.75 percent of all federal income tax, but data from the Tax Policy Center, a nonpartisan research group, shows that roughly 45 percent of American households pay no federal income tax at all because they either have no taxable income or because tax breaks cancel their obligations.

Regardless of where anyone stands politically, it would be difficult to make a compelling argument as to why our federal tax code shouldn’t be simpler for everyone.

“America’s tax code is beyond repair,” Rep. Kevin Brady, a Texas Republican, wrote in the Wall Street Journal last summer. “Tinkering with it won’t work.”

The tax code currently stands at some 75,000 pages. Not only is it too big and complicated, but, as Rep. Brady points out, tax rates — for both individuals and corporations — are too high, the standard deduction is too low and there are too many loopholes for special-interest groups.

We need bold, comprehensive tax reform — not only to minimize America’s stifling and overly complicated tax burden, but also to promote the savings, investment and job creation necessary to generate real economic growth.

Don't miss the big stories. Like us on Facebook.