Transcripts For CSPAN2 Ways And Means Subcommittee Considers

[inaudible conversations] spiritous subcommittee would come to order on how will simplify the broken tax code before we get started with Opening Statements about 80 yield to the chairman brady for the distinguished witness before us today. They give for your leadership of tax policy that such an important time in americas history and for hearings like this to have the conversation with a more progrowth tax system. Thanks to the witnesses of a special welcome to our friend former leader of this committee and a longtime mentor to me personally. Thanks for being here to share your insight. I would like to take a moment for the legacy at the ways and Means Committee actually serving on the committee 20 years chairman of the 1995. And the strong voice of 1986 lower rates for americans with complexity with those tax figures and to bring the same passion and determination that the tax code works for the American People and not against them. And to do those same taxes year after year to know intimately the complexity and the cost of a complicated code. Laying the foundation for the pro growth that is a source of inspiration and as chairman archer retired to be selected on ways and means and to welcome you back to the committee with your decades of Public Service bin thank you for your service and were excited for your testimony. Thank you for that welcome and roy the job you are doing. Think about it on this side so and i can click up the flight tool in chooses seats i can have a charge of my credit card and get a boarding pass with a twinkle of the i and if i have 10 seconds of that spinning around my attitude is what loser makes this . It is ridiculous period we have an expectation of these and simplicity that is basically the norm. Contrast that with our tax code which is so complicated every year the majority of taxpayers cannot figure out how much money they owe by themselves it has grown so bloated to the point it is treating productivity in giving a headache to every taxpayer. Good news. Nobody likes it or defense it nobody says i love that Internal Revenue code dont make changes. We have deep divisions among us but it is so interesting nobody is defending that status quo. Better news. So dramatically to simplify the code. Taxpayers according to that proposal. Seven pooley 7 higher wages every year millions of americans spend hours to figure out americans bin 2. 6 billion hours trying to calculate what they need to pay of calcium translating over affirmative billion dollars of lost productivity witness should be so easy that nine out of 10 people say how much they should pay the government with a household if paying their taxes and think of my constituents sitting at the table trying to figure out what they owe looking at the 1040 to figure out their deductions and deduct enough to itemize or the standard . Qualified for the additional standard . Or the personal exemption for the Child Tax Credit that when they are really confused they can read the whole full i. R. A. Skied for individuals on page two under six it starts off with how to begin your taxes. Fulltime they think if they have meyer if they could hire somebody than they pay less because for more than 30 years the tax code has not been updated and is polluting with special interest canal contains 80 items. Clearly it is inherently unfair because they doha more about the tax code. Those filing as simple as a postcard and no more uncertainty youre worrying the government will come after you to be in a hard copy form for every taxpayer to use. First proposed to eliminate all but a few deductions into those seven brackets to lower the tax rate for all americans in the process and repair together the standard deduction and personal exemption and use the savings from eliminating those deductions to the standard deduction and 95 percent of americans will use that. Finally combine the Child Tax Credit with personal exemption and with these changes americans will no longer have to worry if they are wealthy enough to get a better deal. As a committee we have a choice to grow the economy to create a fair system ameritech can trust. With this in mind i am pleased to welcome our menaces i am pleased to hear your testimony working with colleagues on both sides of the aisle with the tax code that helps all americans including my constituents. Now for the purpose of his Opening Statement i would recognize the Ranking Member. Welcome to all witnesses to consider the impact of proposed tax reform this is the first consideration of this matter since we passed the House Republican blueprint to coincide with what appears to be the demise of the first republican tax cut that large the masqueraded as a whole preform bill. Is important to consider how that proposes individual taxpayers from the more than 400 billion of tax breaks for individuals that is proposed, those making more than 1 million each year will have pocketed in average of 57,000 a piece with a small tax cuts middleclass believes will have been wiped out by health care cost. Also how the bill was presented into hotel lessons have been learned from the approach of interlocking and key in the capital with that single administrative official to testify about the bill to be held accountable when they were all denied there was some concern is that would be presented for a hearing asking chairman orrin hatch of the eric be a hearing and tax legislation not all written behind closed doors i will submit for the record in exchange with senator rick telesco and i hope we will not see the same thing happen in senator hatch will say this is a more open process and to simplify the tax code many of those additions in recent years with the special advantages were offered to some adding complexity to the system i have offered legislation to consolidate into the expanded American Opportunity tax credit to make it easier for young people to Access College and use the same credit for job training as so Many Americans tried to seek new opportunities to make a possible for them to provide for their family in a more adequate way. And to get the full benefit of American Opportunity tax credit. And considering a budget with the social Services Including Funds Available for telegrams. And for those who have no dependent children and an idea that speaker wright and has endorsed. Now our colleague has offered a bill to expand the Child Tax Credit. I the each of these a potential for discussion but not if only to be off the table and it is important to apply after president trumps appointees secretary of the treasury in not seeking any that tax breaks and while we sympathize that there would not be a net tax cut. But i would like to see is follow that rule is we consider simplicity and fairness. And with that not educational opportunity. Let me just comment briefly. And but failure looks like with nancy pelosi of speaker of the house says pass the bill to know what is in a. And with that lack of cohesiveness when we were considering the Health Care Bill and it was started by the senior republicans. When will i hear about the republican amendments . That is a line from a gospel song. And then we never got to those. Having the fourth hearing on the blueprint with a lot of discussion and with the blueprint now is the perfect time touche transition. And then chairman brady already introduced on ways and means. And how to craft legislation and then we welcome your testimony. And with electronic revenue. The with that fiduciary plan advisers and Eric Rodriquez with the advocacy of legislation. And i will be gentle. Is truly an honor mr. Chairman to be in this room again. Have is that . I pushed the button i dont know what else to do. Issing said it is better. I will get closer. As chairman brady said with great aberration in with these concerns today. And they exist today and from 25 years tonight. But in to alter the course of the country but to rise to the occasion to complete complete those fundamental tax reform. But to change radically and then for americans end is in many ways much more difficult answer the more challenging. In those complications have increased. And with those 50,000 changes in the tax code and with those individuals and that figure is probably out of date. So also into chairman brady for taking the lead. And in terms of having a tax code with those marketplaces in the world. And all we ever want for this country is a very vintage. And hopefully get what we had with our tax code 30 years ago but we have lost that. Into ruby a clearing competitive lead. En to be truly comprehensive document but with bad bill introduced several years ago with chairman camps foundations have been made better overdue with those twists and turns of of legislative process to develop a comprehensive document that will clearly be the new starting point not only did i do my own federal tax return but i did that with a pencil and a yellow writing tablet and not a computer. Believe me it was very frustrating but the staff of the joint committee i did that the related to the Tax Deductions there was no form. So i contacted the committee in the said we cannot give you a form but we can tell you how to prepare by he and and i think they will take it. That is terrible tax code. So with the political effort needed to achieve but there is a support group of a man Many Americans for every special provision that is in the code that they must counteract to finally reach your goal. Until recently expiring tax provisions required a new legislature and having to address this problem it was able to make tax reform possible. I urge you to make is the hallmark of any tax legislation. The American Public needs to plan to make their Financial Decisions in the environment where does not change every year. That makes it extremely difficult. I have always describe our tax code and if you are not lawyers so whenever you provide like of magnet will draw in all kinds of complications it will be very difficult to resist and that is what we have today. Saddam eating every incometax code and i will add live just very quickly to tell you i lost confidence in being able to have an effective and simple income tax at the end of the 86 of the rations. It is a matter of record that we should abolish the entire code. And replace it with the consumption tax those that do not have to deal of all with the irs and to me that would be very attractive but that is a big step that is beyond where you can go. I could not make that happen so im sure you can not. But certainly we need to find a better way than the current incometax. I appreciate the unique opportunity to return to this hallowed environment the most beautiful of ruth in the capital of the United States to be able to address you. I dont have a magic answer for you. I wish i did berkowitz is extremely complicated i am glad frankly europe there today and i am not. Thank you. Any way that i can be helpful. Mr. Chairman and Ranking Members of a him honored to testify on electronic communication advancement. Launched in 1994 at the request of the irs provide a means of collective communication and coordination across the tax ecosystem to a fancy electronic tax filing and attacks administration. Members are present a wide diversity of participants from tax software and Technology Firms to storefront changes the System Integrators and financialservices companies were proud to have been a part of the National Adoption of the electronic tax filing more than two decades. The 1998 restructuring in reform act adopted a Public Policy objective of a the e file and adoption by taxpayers that is efficient reduces government operating costs and improves accuracy. Today almost 90 percent of all individual tax returns are electronically filed. That accomplishment is a direct outcome of Publicprivate Partnership in technology innovation. The innovation in that process is not the only thing that has changed over the last 30 years but the tax code has changed. So with those characteristics of the Small Business has changed and evolved in that would empower individuals and Small Businesses more recently recently to understand their own taxation and that engagement of affairs leading to better Financial Decisions and their families. Private Sector Development has sharply reduced the pain and complexity of Tax Compliance while bringing inaccurate preparation with the economic goal reached for all or they are assisted by professional negative professional tax practitioners privatesector innovation has taken complexity of the tax code to simplify for the tax payer. They have dated driven and simplified it to allow direct importation of Financial Data in to a tax returns from the original data source. These Technological Innovations have made compliance faster and easier and more accurate. However simplification reform streamlining the tax code itself with greater simplicity and ease of compliance is the right policy direction we believe simplification reform strategy is Common Sense Solutions so there are unique tour is like adjusted gross income all of which have different and conflicting definitions of the code and. Using universal definitions go long way toward easing and understanding. Those for retirement and education for what choice is our best for them in their financial future for the commercial sector knows that natural response of consumers to the multiplicity of options can lead to doing nothing at all. Industry works to simplify this over decades to simplify the underlying tax code can make of big difference to help taxpayers make better decisions. In the same way Electronic Filing was Publicprivate Partnership in 2002 president bush wanted to ensure Free Tax Services were available to reduce the compliance burden that policy led to creation in 2003 and of the irs for a file with no cost to the government or the taxpayer with the result over the last 50 years as a donation of more than 50 million free tax returns from the american taxpayers of modest means operating under those expanded requirements while ensuring competition is Consumer Choice that kind of Publicprivate Partnership has saved public funds and taxpayer compliance cost more recently the Publicprivate Partnership between the irs in the state department of revenue in private sector to fight cyberfried broad that is now under way for more than two years the irs has reported it has slashed case is of Identity Theft refund fraud by more than 50 taking the fight to the next level somebody has created information sharing as existing in the Financial Services sector has the next day that pays of the Publicprivate Partnership long term as policymakers contemplate simplification is important with these divisions of labor for go over the last several years there has been much discussion about the simplified postcard tax return. We would observe in todays environment talking about the electronic post card it has moved well beyond paper to fully benefit from the security safeguard already adopted by the irs to protect the taxpayer and the integrity of the system. I think we can get to the rest of your testimony. They give to the Ranking Member and the subcommittee for the opportunity to speak with you about the importance of tax incentives for Retirement Savings. And the Practice Leader and cofounder of the fiduciary advisers independently owned provider and theyre hardworking employees. I bring more than 20 years of experience i advised 140 Retirement Plans covering approximately 50,000 employees and 2. 4 billion from Retirement Savings. I also served as Vice President National Association of advisers. The voice of the Retirement Plan Advisory Committee part of the American Retirement association. The message i want to convey today is tax incentives are working very well for good savings behavior for tens of millions of American Workers. Seventyfive of households have access to workplace Retirement Plan and 82 are participating. The most important factor to determine workers save enough for retirement is access to a workplace Retirement Plan. Modern workers are 15 times more likely to save if they have a plan that workforces to those of the up by air a half left on their own. Those that freeze retirement con