SITREP - April 18th, 2015

With tax day just behind us, I’m sure you don’t need any reminder of how expensive and frustrating it can be to comply with our tax laws. But this week also marks the milestone in the year when the residents of Florida have collectively worked long enough to pay their state and federal tax burdens. Our founders certainly didn’t imagine the federal government having the power that comes from taking so much of what the people earn, and I’m sure they didn’t envision a system that abuses the taxpayer the way ours currently does. 

Given the timing, I am pleased to report that the House passed a few bills this week to address the abuses exposed in the scandal of IRS agents targeting conservative groups for extra scrutiny. A few of these may sound familiar because the House passed them last year but they didn’t see the light of day in Harry Reid’s Senate. 

In any case, the reforms are pretty basic (and in my opinion, shouldn’t have been necessary in the first place). The first would make it a fireable offense for IRS employees to target a taxpayer for political beliefs. The second would create an appeals process for charities denied tax-exempt status. In addition, we’d mandate increased email transparency. The third bill would establish a “taxpayer’s bill of rights.” The fact that we need such a document to protect us from an agency that is supposed to be working for us is pretty sad. Given everything that has transpired, it’s clearly a necessary step. 

Also of note to our fellow Floridians, the House also voted to make the state sales tax deduction permanent. As you may have noticed, we go through this annual theater every year of temporarily extending this provision. Nobody really ever expects it to lapse, but for citizens of states like ours where the sales tax is the main tax, it creates unnecessary heartburn (and wastes valuable floor time in Congress). The policy should be permanent and the House has moved to make it so. 

Finally, the House repealed the death tax which, in my opinion, is an example of so much of what’s wrong with our current tax system. The death tax contributes less than half a percent of federal revenue, but it causes people to break up family businesses and farms in order to pay the 40% tax. It’s money that in many cases has already been taxed several times over – at the corporate level, the payroll level, and the investment gain level. Even after taxing the same dollar three times, some in Congress feel like the government deserves another 40% on top for its efforts. It makes no sense for a family to lose a farm or a family home to the government. We ask Americans to work hard, to save, and to invest wisely. When they do, the government wants it’s piece. When people do the opposite, the government wants to subsidize them. For many of us, that’s utterly backwards and we’re going to keep working hard toward tax reform – both the collection and administration of it and the broader code itself. 

I hope I haven’t taken up too much of your time. But with tax day falling this week, it seemed like a good opportunity to revisit everybody’s favorite topic. As always, if I’ve missed anything or there’s something you think I should be aware of, please let me know.

Thanks again. 

Sincerely,
Rich Nugent
Member of Congress