While working long hours in his job as a banquet bartender, my father found motivation in the idea that his efforts would give my siblings and me the chance at a life better than his own. He knew every dollar he brought home would go toward providing a happier childhood and a better future for his children. For him, we were the “why” of his work.
I believe every American has a “why” for the work they do each day. Every one of us can point to something – or someone – and say: that is why I get up each morning to tend this bar, or staff this reception desk, or work the floor of this factory. These motivators form the basis of our American Dreams.
As much as these dreams vary from person to person, we can all agree that funding a growing government is not our primary reason for working hard. But this Friday, as we mark Tax Freedom Day, we have a jarring illustration of just how much time we spend working to finance government rather than our own dreams.
Tax Freedom Day is the first day of the year people have earned enough to pay their full annual tax burden. As of Friday, Americans have earned a combined $4.8 trillion in income since January 1st – the exact amount of state, local and federal taxes we will owe for 2015.
This means the American people, taken as a whole, have spent 114 days of the year working not for their own American dreams, but for government. It means 31 percent of our national income belongs not to our families, but to government. It means Americans will collectively spend more on taxes in 2015 than we will on food, clothing, and housing combined.
If this is not staggering enough, consider the fact that the $3.3 trillion we will pay in federal taxes this year is still not sufficient to cover federal spending. Washington, D.C. will spend a projected $580 billion more than it takes in this year, which will be added to our already $18 trillion national debt.
Since many believe it will manifest itself in taxes down the road, some economists want this projected deficit to be included in our calculations for Tax Freedom Day. If we were to do so, Tax Freedom Day would fall on May 8th of this year – exactly two weeks from now, which for many Americans is an entire additional paycheck.
Tax Freedom Day provides us with a valuable opportunity to view taxes in the perspective of our daily lives. It raises important questions. Is government working well enough to justify taking 114 days’ worth of our income? Are we truly prioritizing the most essential duties of a limited government, starting with our national defense? And how can we make our tax system fairer, simpler and geared more toward empowering our people than empowering our government?
Along with Senator Mike Lee, I have designed a pro-growth, pro-family tax reform proposal that would lower rates for the vast majority of Americans. It would consolidate the personal income tax into two simple brackets – 15 percent and 35 percent – and promote economic growth by cutting taxes on investment income, ending the marriage penalty, eliminating double taxation for international business earnings, and integrating business taxation for pass through entities and corporations with a maximum rate of 25 percent.
It would also expand the current child tax credit up to $2,500 per child, and provide a new personal credit of $2,000 for individuals and $4,000 for joint filers to replace the standard deduction and personal exemption. These credits would allow the American people to keep more of what they earn, and help offset the cost of raising the next generation of Americans.
Just as my father’s hard work was driven by the hope of providing his kids with a better life than his own, all of our people expect to be able to spend the fruits of their labor according to their own priorities. The belief that we can advance our American Dreams through hard work is what spurs our productivity, drives our innovation, and guides the progress of our nation.
On this Tax Freedom Day, we see the way our current tax system clouds our American Dreams and reduces the incentives to pursue them. By establishing a modern tax system that lowers rates, empowers our people, and still meets the needs of a limited but effective government, we can restore fairness to our tax system and promote a growing, opportunity-rich economy for all our people.