[Congressional Record (Bound Edition), Volume 150 (2004), Part 12]
[Extensions of Remarks]
[Page 15921]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               TAX REFORM

                                 ______
                                 

                       HON. STEPHANIE TUBBS JONES

                                of ohio

                    in the house of representatives

                        Wednesday, July 14, 2004

  Mrs. JONES of Ohio. Mr. Speaker, public distrust. That is the main 
reason why we urgently need fundamental tax reform.
  More and more Americans distrust the current tax system because they 
perceive it as unfair. Are they wrong? No. Lower and middle class 
Americans bear a disproportionate tax burden. Small businesses bear a 
great compliance burden. That is unfair.
  Does fairness in our tax system matter? Yes, it matters because tax 
collection depends on voluntary compliance. And in a democracy like 
ours, people contribute private resources to provide the public goods 
and services we deem appropriate as a community, including helping 
those not able fend for themselves.
  In America, paying taxes embodies a civic relationship of mutual 
responsibility, and people's obligation to pay them is as legitimate as 
any other public duty.
  So, I am glad that we are beginning this discussion of comprehensive 
tax reform--an issue that will only become more important for us in 
Congress.
  Let me offer the following five points to consider as we discuss this 
important issue:
  First, fundamental tax reform is a necessity. The current tax system 
is complicated, inefficient, and unfair. Its unpopularity is warranted, 
and that is a problem because that breeds distrust.
  The tax code must be simplified in order to eliminate wasted time and 
money spent on compliance. For example, the average taxpayer with a 
self-employed status has the greatest compliance burden in terms of tax 
preparation--59 hours.
  Furthermore, the complexity of the tax code is evident by the fact 
that small businesses overpaid their taxes by $18 billion in 2000 and 
2001 because of return errors, according to a GAO report. Small 
businesses unfairly bear the burden of the tax code's complexity simply 
because they do not have the financial resources to hire sophisticated 
tax advisors.
  Second, simplification can occur only with fundamental tax reform. 
This is clear after decades of incrementalism. We know that tax reform 
cannot be done in a piecemeal fashion. The current tax system is flawed 
at its root. Hard-working, middle-income class people bear the largest 
burden in our current tax system.
  Third, fundamental tax reform must focus on the tax base. Our tax 
base is derived from total income. However, this is complicated by the 
bewildering array of adjustments, deductions, credits, omissions, and 
mismeas-
urements. This undermines the fairness of our tax system. Therefore, 
fundamental tax reform must focus on the issue of the tax base in order 
to achieve equity, efficiency, simplicity, and accountability.
  Fourth, the tax code must encourage entrepreneurship. Small 
businesses provide our economy's foundation. They need a tax system 
that frees resources for investment and ensures affordable capital. We 
must support small businesses, which make up the backbone of our 
economy.
  Fifth, fundamental tax reform is possible. Tax reform is not an easy 
task. However, the American public demands it. They see our tax system 
as unfair, and they are right. As it was in the mid-1980s, the time is 
ripe to begin taking serious steps towards achieving fundamental tax 
reform. We must listen to our constituents and be up to task to 
implementing a fair tax system.

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