Rodriguez for Congress campaign
Tax Reform

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[July 02, 2016]  To many individuals the U.S. Tax System is a reflection of the government as a whole, as the tax code is bloated, unnecessarily complex, and seemingly broken. If we were to combine all the statutes, regulations, and related case law that constitute the tax code, the total would include about 70,000 pages consisting of more than ten million words. Such a lengthy and complex system creates a huge burden when it comes to the amount of time and related costs to comply with our broken system to the tune of an estimated 8.9 billion hours and $409 billion in lost productivity per year.

 Much of the complexity in the tax code results from the numerous deductions that have accrued over time due to the toxic influence of special interests. In addition, the U.S. currently maintains the highest marginal corporate tax rate of all developed nations in the world at 39.1 percent as compared to the average rate of 24.1 percent among the other developed nations. This system is untenable since such a tax rate makes the U.S. a less competitive place to do business and encourages multination corporations to find creative ways to shift as much income overseas to countries with lower tax rates. This, in turn, creates an unwieldly situation in which the firms that have the most creative accountants benefit over those that provide the best products and services. Moreover, this causes tremendous disparity in the amount that different companies pay in taxes while also decreasing government revenues and limiting necessary vital services.

With such a high level of complexity and a high compliance cost, it is clear that we need to do better to reform our current tax system. The goals of any tax reform initiative should be to reduce complexity, to create a fairer system, and to reduce compliance costs so that individuals and businesses can reallocate their resources to more productive tasks. In order for us to achieve this end, we must work together in a bipartisan fashion to restructure our tax system rather than simply applying new bandages to a broken system.

Such fixes to the tax code will need to include a simplification in the number of the special deductions and tax credits that are currently available. Since these deductions and credits create unneeded complexity, we can more effectively achieve the goal of generating government revenues without increasing tax rates on average Americans by creating simple individual and family allowances that would be available to all Americans to ensure that equitability and fairness are essential elements of any tax system overhaul.

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In addition, it is essential that we create a more competitive corporate tax system that reduces the marginal tax rates on corporate income while simultaneously eliminating tax loopholes for certain business that cost the government billions of dollars in needed revenue. Such a step is important to create an environment where entrepreneurs can focus on running their businesses instead of navigating the tax system. As Americans, we do not have to accept a broken and overly complex tax system. Instead, we should and must demand true reforms that streamline the system and raise sufficient revenues to fund government services adequately. By making a firm commitment to bipartisanship in order to get things done, we can achieve real reforms such as creating more competitive corporate tax rates, an idea for which both Democrats and Republicans have indicated support in the past.

Junius Rodriguez believes that essential fairness must be the benchmark as we reform the U.S. tax code. He noted that “Great nations are those that shoulder the responsibility that is incumbent upon them rather than bequeath to future generations the burden of our folly. True tax reform that is fair and equitable in nature can be our greatest civic undertaking of this century, and if done properly, it can generate much-needed revenue to serve the nation’s interests. This is what the People today are demanding of those who wish to serve and lead.”

[Text from file received]

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