07.09.2013 0

IRS scandal makes the fire hot to deal with tax reform

By Willie Deutsch

On the first of the year, Speaker Boehner announced that “2013 Must be About Cutting Spending and Reforming the Tax Code.”  At the end of that statement he made it clear that, “Without meaningful reform of entitlements, real spending controls, and a fairer, cleaner tax code, our debt will continue to grow, and our economy will continue to stumble.”  Two months later he spoke of the need to generate revenue through tax reform, and pledged that, “H.R. 1 will be reserved for tax reform legislation. Tax reform that lowers rates, closes loopholes, will help create more American jobs and promote more economic growth in our country.”

The need to push for tax reform was emphasized again recently as “Republican lawmakers have suggested coupling a debt-ceiling increase with tax and entitlement reform,” and a number of other issues.

The Speaker’s push for tax reform, and the recent IRS scandal make it the perfect time to make this happen.  Tax reform is never an easy thing to pass.  Lobbyists are invested in a system that let’s them create tax breaks for their clients, and politicians enjoy the ability to reward and encourage people through favorable tax laws. One of the prime examples of loopholes being maximized is when General Electric, whose CEO led Obama’s Jobs Counsel, used them to pay no taxes in 2010.

Obviously large businesses who have thrived milking the tax system, suddenly being forced to pay taxes as a result of eliminating loopholes is something that will be fought viciously.  Painful legislation requires impetus to get it passed, and the IRS scandal may have provided just that.

In the IRS scandal the American public was finally awakened to the danger of a growing Internal Revenue Service.  Seeing the agency that handles everyone’s taxes engage in partisan politics was a wake-up call to everyone.  The right saw the IRS used against them, and the left feared it would be used against them if political fortunes changed.  The scandal showed us the danger of a large bureaucracy that has crept into every aspect of our lives.

The only way to fix the IRS is to slash it, and the only way to slash the IRS is to simplify the tax code.  When the tax code is so complex that multiple tax preparers easily arrive at different tax returns, a large IRS is almost required.  By engaging in tax reform that closes loopholes and eliminates special tax breaks, the need for a large IRS will be reduced.

With the American people already outraged by the IRS scandal, the fire is hot, and it is time to strike before people’s attentions turn.

What we will have to be careful about is that the reform proposal is one that does not raise effectively raise taxes on the whole, a tax reform policy that spurs economic growth will raise revenue, and that is what we need.  It is also what Speaker Boehner has pledged to do, promising to still oppose Obama’s plan to take “a larger share of what the American people earn through higher tax rates.”

Critically, he said he is open to “increased revenue . . . as the byproduct of a growing economy, energized by a simpler, cleaner, fairer tax code, with fewer loopholes, and lower rates for all.”

Let’s strike while the fire is hot, reform the tax code, and turn the IRS scandal into a chance for economic growth.

Willie Deutsch is Editor-in-Chief for NetRightDaily.com, and Social Media Director for Americans for Limited Government.

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