The time is ripe for Washington to seek tax reform, U.S. Rep. Pat Tiberi (R-Genoa Township) told a small group of Westerville CPAs and small business owners last week.
"We need to simplify and reduce rates for everyone," he said.
Tiberi spoke to about a dozen business leaders, fielding questions and taking comments about taxes, during a forum hosted by the Westerville Are Chamber of Commerce May 29.
Congress hasn't been able to bring about comprehensive tax reform since the 1980s, but might be able to do so now, Tiberi said, because legislators on both sides of the aisle are starting to agree that something must be done.
Legislators also might be able to leverage some power to bring about tax reform amid the negative press the IRS has received recently after it was shown IRS officials were unfairly scrutinizing conservative Tea Party groups applying for nonprofit status.
"We're going to use that to our advantage," Tiberi said of the scandal.
Tiberi said what he would like to see is a lowering of tax rates overall, combined with the elimination of some tax credits and deductions.
With the institution of Affordable Health Care Act, the top tier of taxpayers, including many small business owners who claim their business earnings on their personal income taxes, will pay nearly 45 percent in taxes, Tiberi said.
"It's really unfair -- very, very unfair," he said.
Tiberi serves on a subcommittee of the House Ways and Means Committee that deals with taxes, and that committee has held more than two dozen meetings within recent months aimed at finding a simpler tax code.
The committee has looked at simplifying the tax code in general, Tiberi said.
There are too many tax codes dealing with the same issues, he said, such as 16 different tax codes for saving for college, and retirement provisions, such as those allowing for 401(k)s, IRAs and Roth IRAs.
Giving taxpayers options for saving is good, Tiberi said, but too many options create confusion.
"That complexity adds a lot of angst for individuals," he said.
The committee also has looked at which deductions and tax credits could be eliminated easily, also taking into consideration how their elimination would raise revenue, Tiberi said.
Big-ticket deductions such as mortgage deductions and deductions for charitable giving are unlikely to be touched any time soon, Tiberi said, but there are state and regional deductions that affect fewer people the government could look to eliminate.
"What we're going to try to do is reach for the low-hanging fruit and go from there," Tiberi said.
While tax reform likely will be a long and difficult process, Tiberi said he would take a simpler route if he were able.
"If I were king, I would eliminate the IRS. I would have a flat tax, or some kind of national sales tax," Tiberi said. "It would be so much more efficient."