Grab a pencil. Here’s a quiz. How many types of taxes can you list that most Americans pay? Two? Five? Here are some of the more common taxes you might be paying:
- Income taxes – these are the taxes we pay on earnings at the federal, state, and local level.
- Payroll taxes – employees and employers pay Social Security tax and Medicare tax on their earnings.
- Sales taxes – we pay sales taxes on goods and services for everyday items like groceries, dry cleaning, office supplies, and car maintenance.
- Excise taxes – we pay excise taxes if we buy specific goods, like beer and gasoline.
- Property taxes – we pay taxes on our homes, vehicles, or other real estate.
- Estate taxes – Americans (who have paid taxes on what they’ve earned their entire lives) pay taxes again on what they leave behind to their children.
- Gift taxes – we pay taxes when we receive a cash gift from a loved one.
These are just a few of the many types of taxes individuals and families must pay. We also pay city or county taxes. If you are business owner, you pay taxes on your business. If you have investments, those are taxed too. Americans are surrounded by taxes. It’s no wonder our tax system has a reputation for being complex, confusing, and time intensive.
Now imagine if filing your taxes was as easy as making a few taps on a Smartphone. Imagine if you knew, without any surprises, what you would owe each year in taxes. Imagine you could keep more of your own money.
For many people, that seems like a far cry from reality. As it stands today, according to the IRS, it takes the average American approximately 13 hours and $200 just to comply with the tax code — including record-keeping, reading the rules, gathering receipts, and filling out the necessary forms (those numbers are much higher for businesses). There are over 2,000 listings alone on the IRS forms and publications webpage. This year, the average American will work the first 114 days of the year to pay their federal, state, and local taxes, according to the Tax Foundation.
Tax season is upon us, so taxes are on the top of many of our minds. But “taxes” isn’t just a seasonal issue. It’s a personal issue that reaches right into the pocketbooks of hardworking Americans all year round. For many of us, our tax system is defined by the frustration and resentment it engenders. That’s because it is complex and discourages job growth and competitiveness.
When pundits and politicos talk about raising taxes, they often talk about just one of the many taxes we pay as Americans. They usually then suggest that such an increase wouldn’t be so bad. But what these folks fail to understand is that it’s not just a single tax. It’s the cumulative weight of all the taxes we pay – our income taxes, our fuel taxes, our property taxes, our sales taxes, our wireless and cell phone taxes, and the list goes on – that is overwhelming to individuals and businesses. Americans are suffocating under the weight of taxes, whether it’s the amount we have to pay, or the time and effort it takes to simply file them.
The fact is it shouldn’t take an army of accountants or 13 hours for individuals to file their taxes. Americans should feel that they can live their lives without Uncle Sam constantly knocking at their doors. I think taxes should be simple, which is why I adhere to a few simple truths when it comes to taxes.
We should scrap the current overly complex tax code and start over. I’ve supported legislation to overhaul and simplify our complicated tax system – including supporting an optional flat tax and pushing to reform the entire code.
Americans shouldn’t be taxed twice. Americans who have paid taxes on what they’ve earned their entire lives should not be forced to pay taxes again on what they leave behind to their children.
We should ensure internet access remains permanently tax free. As the Internet has grown into a critical resource, it has become even more important that access to the Internet remain unencumbered by taxes. That’s why I’ve supported a bill that permanently bans state and local governments from taxing Internet access, ensuring that Americans can continue to access the Internet tax free.
We should lower the corporate tax rate. Currently, the combined corporate tax rate in the United States is at 39.1 percent. That means, out of the 34 countries in the Organization for Economic Cooperation and Development (OECD), America ranks first for its corporate tax rate, and is third highest in the world. This is crippling our businesses and needs to be fixed.
For all the complication placed on taxes, a solution can really be that simple. Our tax code should be fair, simple, and competitive. In a society where so many tedious tasks have been simplified into a few pixels, why couldn’t our tax code and our tax system be just as easy?
Randy Forbes represents the Fourth District of Virginia in Congress.
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