Tax reform is needed from congress

Many things change from year to year. Tax Day, however, is an exception. Every year, millions of Americans send much of their hard-earned money back to the federal government. Because of the numerous complexities that have become the U.S. tax code, sixty percent of tax filers need an accountant while others just send in a large check out of sheer frustration, hoping to figure out the right number later in the year.

In 1935, our tax code was straightforward and minimal. The 1040 tax form was one page long and the instruction book was only two pages long. Last year, the 1040 form was two pages and the instruction booklet was a lengthy 143 pages. While individuals have to maneuver through complex forms to comply with federal law, corporations are even more burdened. General Electric filed over a 24,000 page tax return to the IRS in 2006. At that time it was on record as being the longest tax return filed in history.

There is widespread agreement all over the nation that our tax code is in dire need of reform. Americans are hearing promises of change, but even at this point in time no one knows what to expect. However, if certain action is not taken soon on expiring tax cuts, individuals and corporations alike are going to be hit hard with higher taxes.

Taxpayers currently wait year to year to see if there will be an extension on state and local sales tax deductions, something very important to Floridians. They also continue to wait to see whether they will get hit by the dreaded Alternative Minimum Tax (AMT). Originally implemented in 1969, the AMT was targeted at 155 of the wealthiest taxpayers. Because it was not indexed for inflation, in 2008 the AMT will encompass nearly 30 million taxpayers and many individuals making less than $40,000 per year will become subject to it unless Congress takes action. This onerous tax needs to be eliminated, and that elimination should not be accompanied by an increase in other taxes as has been proposed in the past.

Sadly, there are more tax increases looming on the horizon. If the 2001 and 2003 tax cuts are not extended or made permanent, nearly every single taxpayer is going to have a brutal 2011 tax year. Nearly all the marginal tax rates will increase anywhere from three to five percent, capital gains tax rates will increase, the double taxation on dividends will increase, and marriage tax penalties will be reinstated. Last but not least, the death tax will reappear again with a top rate of 55 percent after carrying a rate of zero percent the year before. On top of this, the majority party in Congress has indicated no solid commitment to keeping these tax cuts in place, tax cuts that have clearly driven seven years of solid economic growth.

How loud must the voices across America be so that all Members of Congress realize how important it is to start renewing tax cuts and making them permanent? Let's make sure next April 15 the federal government is not reaching any deeper into your pockets than it already is.