We need tax reform, not a money-grab

The Last week, President Obama announced in a speech he would be willing to look at reforming the corporate tax code, but only if a sizeable portion of the savings would be used for more government spending. While the President's interest in corporate tax reform is a welcome sign, this plan does not address the underlying need for tax reform.

We need comprehensive tax reform, not because we need to free up more money to spend, but because the current code is a mess. The last overhaul of the tax system was in 1986 -- before the invention of the internet. In the 27 years since the last reform, the tax code has ballooned to more than 10,000 pages of ever-changing provisions and loopholes. There have been more than 4,000 changes to the tax code in the last decade alone -- an average of one per day.

Complexity makes compliance with the tax code very difficult. The average family spends 13 hours gathering all the paperwork they need to file their taxes. Nearly 90 percent of Americans pay someone else to do their taxes, or use commercial software. Tax compliance takes more than 6 billion hours and costs $168 billion every year -- in addition to paying the actual taxes.

This overly burdensome policy not only makes our economy less competitive, but it also favors the politically well-connected who can afford to lobby for or against specific provisions of the code. True tax reform would simplify the code for individuals as well as businesses large and small. This version of reform would ensure transparency, lessen the costs of compliance, and make the tax code fairer and more competitive for all.

True tax reform would also be revenue neutral. Any money raised by eliminating exemptions and special-interests loopholes should be applied toward lowering the overall rate. I have spoken to many businesses in Nebraska who would be willing to give up their preferential treatment in the tax code in exchange for a lower overall rate. Any tax reform effort which raises revenue is contrary to the idea behind comprehensive reform.

Comprehensive tax reform is not a partisan issue, and represents a all-too-rare opportunity for a major bipartisan agreement. Chairman Dave Camp (R-MI) of the House Ways and Means Committee and Chairman Max Baucus (D-MT) of the Senate Finance Committee have laid the groundwork by establishing an open process to draft a bill with support from Republicans and Democrats.

The Ways and Means Committee has held 30 public hearings and roundtables related to tax reform, released three legislative drafts, and established 11 bipartisan tax reform working groups, including the Financial Services Working Group which I chaired, resulting in more than 1,300 submissions from the public. You can still submit your ideas for tax reform at http://www.taxreform.gov to help inform the House and Senate committees as we continue to write a bipartisan bill.

This open process represents the best chance to get true reform passed through Congress and signed by the President by engaging Members of Congress on both sides of the aisle and the public. Rather than demanding more government spending, the President should support bipartisan efforts to make the tax code simpler, fairer, and more competitive for all Americans.