[Congressional Record Volume 142, Number 63 (Wednesday, May 8, 1996)]
[Extensions of Remarks]
[Page E731]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E731]]


      KEN BLACKWELL MAKES THE CASE FOR A FAIRER, SIMPLER TAX CODE

                                 ______


                           HON. STEVE CHABOT

                                of ohio

                    in the house of representatives

                         Wednesday, May 8, 1996

  Mr. CHABOT. Mr. Speaker, one of the best and most persuasive 
advocates of a fairer, simpler Tax Code is my good friend, former 
colleague on the Cincinnati City Council, and present treasurer of the 
State of Ohio, Ken Blackwell. Today, I would like to include in the 
Congressional Record an op-ed article written by Mr. Blackwell that 
appeared in the April 16, edition of the Wall Street Journal.
  Mr. Blackwell, who has served as a member of the National Commission 
on Economic Growth and Tax Reform, chaired by former Congressman and 
HUD Secretary Jack Kemp, makes a very strong case on behalf of a Tax 
Code that should be so simple that anyone can figure it out. He notes 
the exorbitant costs incurred by individuals and businesses in 
complying with the maze of regulations in the Federal Tax Code.
  Ken Blackwell calls filing our tax returns ``one of life's most 
nerve-wracking, gut-wrenching and mind-numbing chores.'' Millions of 
Americans agree. I commend the article to my colleagues, and I commend 
Ken Blackwell for his continuing service to our Nation.

             [From the Wall Street Journal, Apr. 16, 1996]

                   There's Nothing EZ About IRS Forms

                       (By J. Kenneth Blackwell)

       The message in that letter should be a loud wake-up call 
     for the government. The American people, who experienced the 
     misery of Tax Day yesterday, think our current tax system is 
     far too complex and confusing. It is choking the ability of 
     businesses and families to grow and prosper. It is time to 
     uproot the current disgraceful system and replace it with a 
     clear, simple tax code.
       Mr. Sabus was one of thousands of people who sent letters 
     to the National Commission on Economic Growth and Tax Reform, 
     chaired by Jack Kemp. The commission, on which we both 
     served, came up with six principles that should guide the 
     national debate on tax reform. One of those principles is 
     that the new tax code should be so simple that anyone can 
     figure it out. Unfortunately, that guideline has been all but 
     ignored by pundits and reporters who've been debating the 
     merits of getting rid of the home-mortgage deduction and 
     other aspects of the flat tax.
       The point that they are missing is that much of the 
     public's disgust with the current income tax is caused by its 
     complexity. The cost of compliance is astronomical. The Tax 
     Foundation estimates that in 1994 businesses spent more than 
     3.6 billion hours, and individuals spent more than 1.8 
     billion hours, in preparing tax returns. That equates to 
     approximately three million people working full time 12 
     months a year just to comply with the tax laws! The total 
     annual cost of tax compliance is $192 billion--an amount 
     equivalent to General Motors' entire output for 1994.
       There are other costs that are not included in the Tax 
     Foundation's numbers. One of these is the cost of dealing 
     with an audit or some other contact with the IRS. In 1990, 
     the IRS conducted 1.2 million audits, and sent 4.9 million 
     computer-generated notices to taxpayers regarding their 
     returns or payments. The IRS filed 1.1 million liens and 2.6 
     million levies, and penalized a third of all employers for 
     payroll tax deposit errors. Needless to say, taxpayers spent 
     a considerable number of hours in these contacts with the IRS 
     in addition to the time they spent preparing their tax 
     returns.
       Why does it take so much time and energy to comply with the 
     federal income-tax laws? Consider the sheer size of the tax 
     code and regulations and the number of times changes that 
     occur. From 1954 to 1994, the number of words in the sections 
     of the Internal Revenue Code relating just to income taxes 
     increased to more than 800,000 from less than 200,000. And 
     there were constant amendments to the tax code. Every 
     amendment requires new forms, new instructions, new record 
     keeping and new calculations.
       Who can understand all of this? Certainly not the average 
     family or small business. Not even professional tax 
     preparers. Money magazine's annual survey of return preparers 
     suggests that as few as 10% of the professional preparers can 
     come within 10% of the correct tax when asked to complete a 
     return for an individual taxpayer with moderately complicated 
     facts. The tax code is so complicated that the IRS itself, 
     according to a 1987 General Accounting Office survey, gives 
     taxpayers the wrong information 47% of the time.
       Critics of tax reform frequently suggest that the tax law 
     is not that complicated because most individual taxpayers 
     file the simplest returns, a Form 1040EZ or a Form 1040A. 
     Unfortunately, even the simplest returns are not that simple. 
     The IRS notes proudly that it should take taxpayers ``only'' 
     two hours and 42 minutes to complete the 1040EZ. Why does it 
     take so long to fill out a form that is just a little bigger 
     than a postcard? The instructions for the 1040EZ are 36 pages 
     long! And the instructions for the Form 1040A are 79 pages.
       Furthermore, although taxpayers may end up filing a Form 
     1040EZ, many are still likely to keep (or try to keep) the 
     records that would be necessary were they to file a longer 
     form. For example, they may keep records of charitable 
     contributions, mortgage interest, child care expenses, 
     medical expenses, state and local taxes, tax return 
     preparation fees, and work-related expenses such as union 
     dues or professional association fees.
       The problems with filling out tax returns are far more 
     serious for businesses than for individuals. Each business 
     must deal not only with the burdens of determining its tax 
     liability, but also function as a record keeper and private 
     tax collector for the IRS. Businesses must send the IRS (with 
     copies to the taxpayer by first class mail) more than a 
     billion reports annually. While this information is essential 
     for our tax system to function, we must be cognizant of the 
     costs imposed on businesses by such mandates.
       As we said in the tax commission's report, filing tax 
     returns will never be anyone's favorite pastime, but neither 
     should it be what it has become: one of life's most nerve-
     wracking, gut-wrenching and mind-numbing chores. The current 
     tax code is exceedingly expensive to comply with, 
     increasingly difficult to enforce and oftentimes impossible 
     to understand.
       Long ago the authors of the Federalist Papers warned, ``It 
     will be of little avail to the people that the laws are made 
     by men of their own choice if the laws be so voluminous that 
     they cannot be read, or so incoherent that they cannot be 
     understood.'' A simpler tax system will let Americans get a 
     handle on their taxes, a grip on their government and a hold 
     of their future.

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