Joe Pitts, April 11, 2008

It’s April, which means Americans are once again scrambling to sift through the myriad paperwork needed to file their federal taxes. Tax day, as usual, falls on April 15. However, tax freedom day, the day when the average American has earned enough to pay off federal, state, and local taxes, will not come until April 22. That means the average American will have worked for 113 days this year before they get to actually keep their earnings.

Tax day is not simply a box noted on the calendar. It represents serious consequences for the American people and the American economy. The IRS estimated that individual and business taxpayers spent 6.65 billion hours complying with the tax laws fiscal year 2006. That is the equivalent of 3.2 million employees working 40-hour weeks year-round without any vacation

Tax day and tax freedom day are even more significant to the average American family this year because of the shaky state of the economy. With prices for gas, groceries, and medical expenses rising, most Americans will find it even more painful than usual to file their taxes. This makes it even more distressing that the budget just passed by the House contains the largest tax increase in American history.

Much of the tax increases will come in the form of allowing the tax cuts from 2001 and 2003 to expire. If there were any doubt among lawmakers on Capitol Hill as to what increasing taxes does to suppress job creation and economic expansion, Federal Reserve Chairman Ben Bernanke made clear during recent testimony that increasing taxes would be harmful to our already suffering economy.

It may be that politicians in Washington become insulated from what the tax burden means to the average American family. Entrenched Members of Congress begin to see the dollar signs followed by ones and zeros as just figures in the budget game. I know that money sent to Washington is money that American families cannot spend on buying groceries or paying school tuition. I understand that tax money is not a right of government officials, but a sacrifice made by American families.

This is why the budget we are currently working under, as passed in the House, is so dismaying. It proposes to increase taxes on nearly everyone, in nearly every way. Here is just a small list of the proposed increases if we do not make the current tax cuts permanent:

Taxpayers will no longer be allowed to deduct their state and local general sales taxes from their federal income tax. Taxpayers will no longer be able to deduct tuition and related expenses. Businesses will not be able to claim a tax credit for research, experimentation, and development activities. Income tax rates will increase, for almost every bracket, some by five percent. The marriage penalty will be restored, meaning couples who get married will have to pay more in the way of federal income taxes simply for having taken their vows. The child tax credit will be cut in half. The death tax, which has been decreasing each year and heading for a complete phase out, will snap back into place; at a top rate of 55 percent, it is by far the most burdensome tax on the books. The alternative minimum tax, a tax once meant for the ultra-rich, will continue to engulf a larger and larger portion of the middle class.

Tax day does not need to be such a burden. Speaker Pelosi and Chairman Charlie Rangel, of the tax-writing Ways and Means Committee, would do well to look into the Taxpayer Choice Act. This bill, of which I am a cosponsor, would vastly simplify the tax system, by creating just two income tax rates (10 percent and 25 percent), with a generous standard exemption amount, and no special tax preferences. And it would actually give individuals the choice to file under the current system or the new simplified system, whichever they find more beneficial. With a simplified tax code and low tax rates, businesses could get back to work creating jobs, individuals would have more money to pay for groceries and gas, and a couple billion hours of time could be devoted to anything more useful than filling out IRS forms.

Congressman Joe Pitts, a Republican, represents Pennsylvania's 16th Congressional District, which includes Lancaster County and parts of Chester County and Berks County.