September 16, 2013 at 6:00 AM
NEW PROVIDENCE, NJ – A stalwart panel of tax experts, moderated by Congressman Leonard Lance, all agreed that the current federal tax system is clearly broken but, not surprisingly, differed in approaches to solve the problem.
Kicking off the forum, the personable and affable congressman, clearly at ease with an audience of about 100 residents Thursday night, described New Jersey as a sending state meaning that the state sends more tax revenues to Washington, D.C. than it receives in turn.
“We are taxed heavily at the local level through property taxes,” he said.
Lance lambasted the Internal Revenue Code which he said contained more than 5,600 pages. “That’s seven times as long as the Bible with none of the good news of the Bible,” he said.
Again taking potshots at the current tax code, Lance said that nine of ten taxpayers rely on professional tax preparers or software applications to file their taxes.
"We need something simpler, fairer and more conducive to growth,” Lance said.
Lance paid particular attention to small businesses which account for the creation of seven of every ten new jobs in the country. “The United States has the highest corporate tax rate in the world,” he said.
Lance said that his one wish for the current congressional session was to introduce tax reform that could make the tax code much simpler.
Although oft topic concerning tax reform, Lance said that phone calls and email from constituents was virtually unanimous in opposition to intervention in the current crisis in Syria.
“I would not have voted for military action,” Lance said while also expressing suspicion of Russian President Vladimir Putin.
Joining Congressman Lance were four speakers possessing impressive credentials regarding taxes and the Affordable Care Act.
Chris Dubay, a senior policy analyst at the Heritage Foundation in Washington D.C. presented a strong advocacy for a flat tax that applies the same tax rate to every taxpayer regardless of income bracket. A flat tax applies the same tax rate to all taxpayers with no deductions or exceptions allowed.
He described the current tax code as broken and dysfunctional. “The more you earn, the more you pay,” he said.
Supporters of a flat tax system propose that it would provide taxpayers an incentive to earn more because they would not be penalized with a higher tax bracket.
“The current tax code is an albatross around our neck,” Dubay said.
The Fair Tax Plan, an alternative approach, was advanced by Steven Hayes, who is a national spokesperson for Americans for Fair Taxation and a member of the board of directors for the Florida Fair Tax Education Association.
“There are two types of people who don’t like income taxes. Men and women,” Hayes said in his opening remarks which drew loud applause from the audience.
The Fair Tax Plan, he said, allows people to keep their entire paycheck and only pay taxes on what they spend.
The Fair Tax is a national sales tax that would treat every person equally and allow businesses to thrive, eliminating the current complex tax code and the Internal Revenue Service, he added.
Hayes said that tax evasion would be substantially reduced since the new national tax would be collected by 7 percent of local retailers that account for 93 percent of local sales tax collections. He added that more than $3 trillion was un-taxed.
“This will spur economic growth at every level of the retail process,” Hayes said.
David Burton who is the general council for the National Small Business Association located in Washington D.C. addressed the effect on taxes caused by the Affordable Care Act more widely known as Obamcare.
He called the new law a “train wreck” consisting of 20,000 pages of complex language.
“There is every reason to believe that health care costs will go up,” Burton said. One dollar of every six dollars spent is on health care, he added.
One chilling prediction Burton offered was that the cost of the health plan would place an onus burden on young people already saddled with over 1 trillion dollars in student loans.
The last speaker was Henry “Chip” Dickson, a Summit resident and author with a long history as one of Wall Street’s leading bank analysts.
Dickson said that not only does the country need a simpler from of tax collection, but also a more articulate way to communicate the alternatives.
“Our tax system needs to be simpler and to aid in a faster economic recovery,” he said. Noting that Congress is exempt from Obamacare, Dickson received large cheers when he said, “Rulemakers should have to live by the rules they set.”
The forum was sponsored by the Suburban Chamber of Commerce which represents Summit, New Providence and Berkeley Heights.
Wrapping up the session, Lance was adamant that the nation was in dire need of tax reform.