Tax Day. The annual rite of passage where, nationwide, Americans fill out paperwork or hire an accountant, to ultimately hold their noses as they write a check payable to Uncle Sam. No other issue is as important to the everyday lives and bottom lines of families and businesses around the nation as our tax code. But interestingly enough, few other issues are as complex or politically challenging.
The good news for Americans this Tax Day is that some in Washington have proposed changes to the tax code that will not only help save you time and money, but also help out businesses of all sizes in communities across the country. It's called the House “Better Way” Blueprint and here are the top five benefits you should know about with this tax code overhaul:
1. More Money in Your Pocket
Who doesn’t like more money? NOBODY. The House Blueprint is a pro-growth punch to our economy that will mean savings for both individuals and businesses. In fact, the Tax Foundation estimates that there will be an 8 percent wage increase nationwide. A bigger pay check? Love it. They also find that an average family would save approximately $4,600. We don’t know about you, but that’s money we could put toward groceries, our children’s education, and making some long-overdue home repairs.
Federal tax laws today fill approximately 70,000 pages – almost triple the number of pages from the last time we reformed our tax code in 1986. In fact, even a concept as simple as “married” takes 218 words and five paragraphs to define. For families and individuals, the new tax system will simplify and lower tax rates. How simple? Leaders in Washington say filling out your taxes will be simple enough to fit on a postcard for most Americans.
3. Jobs, Jobs, and More Jobs
You may have one, but not everyone does. By updating our tax code, we will create a more business-friendly environment that will encourage investment in American production. More goods and services produced here in the U.S. means more jobs up-and-down the supply chain, from construction to factory workers to sales – the House Blueprint is a domestic job creator. How many jobs? Approximately 1.7 million. That is more than 5x the size of the population of Iceland.
4. Much Needed Expensing
Did you know that businesses with less than 20 workers made up nearly 90 percent of U.S. employers? That’s right, your neighborhood pizza place is the type of business that keeps our economy going. But unfortunately, small businesses have to navigate the complexities of our tax code that large corporations handle with an army of lawyers. Tax reform under the House Blueprint will implement a whole gaggle of reforms, like immediate business expensing. Small companies live off their cash flow, so their ability to fully deduct business investment often is critical to their investment decisions. The Blueprint will allow companies to immediately write off the cost of any new building, equipment, and inventory. Now your favorite pizza place can get that second oven and you don’t have to wait in line so long.
5. A Modern Code For the Modern Day
The last time we updated our tax code was 1986. But you aren’t using the same cell phone or car you had back then… so why should we be using the same tax code? It’s clearly time for an upgrade. The bad news: our competitors across the globe already got this message. The U.S. has one of the highest business tax rates in the developed world, while our global competitors continue to cut their rates aggressively making it easier for individuals and companies to do business. In fact, more than 160 countries have adopted new tax systems in recent decades, skewing the playing field against us. The good news: proposed changes to the tax code would modernize our tax structure to level the playing field and move us back to the top of the competitiveness list.