SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Pathway to Job Cre-
ation through a Simpler, Fairer Tax Code Act of 2012’’. 
SEC. 2. FINDINGS AND PURPOSES. 
(a) FINDINGS.—Congress finds that the following 
problems exist with the Internal Revenue Code of 1986 
(in this section referred to as the ‘‘tax code’’): 
(1) The tax code is unfair, containing hundreds 
of provisions that only benefit certain special inter-
ests, resulting in a system of winners and losers. 
(2) The tax code violates the fundamental prin-
ciple of equal justice by subjecting families in similar 
circumstances to significantly different tax bills. 
(3)(A) Many tax preferences, sometimes re-
ferred to as ‘‘tax expenditures,’’ are similar to gov-
ernment spending—instead of markets directing eco-
nomic resources to their most efficient uses, the 
Government directs resources to other uses, creating 
a drag on economic growth and job creation. 
(B) The exclusions, deductions, credits, and 
special rules that make up such tax expenditures 
amount to over $1 trillion per year, nearly matching 
the total amount of annual revenue that is generated 
from the income tax itself. 
(C) In some cases, tax subsidies can literally 
take the form of spending through the tax code, re-
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distributing taxes paid by some Americans to indi-
viduals and businesses who do not pay any income 
taxes at all. 
(4) The failure to adopt a permanent tax code 
with stable statutory tax policy has created greater 
economic uncertainty. Tax rates have been scheduled 
to increase sharply in 3 of the last 5 years, requiring 
the enactment of repeated temporary extensions. Ad-
ditionally, approximately 70 other, more targeted tax 
provisions expired in 2011 or are currently sched-
uled to expire by the end of 2012. 
(5) Since 2001, there have been nearly 4,500 
changes made to the tax code, averaging more than 
one each day over the past decade. 
(6) The tax code’s complexity leads nearly nine 
out of ten families either to hire tax preparers (60 
percent) or purchase software (29 percent) to file 
their taxes, while 71 percent of unincorporated busi-
nesses are forced to pay someone else to prepare 
their taxes. 
(7) The cost of complying with the tax code is 
too burdensome, forcing individuals, families, and 
employers to spend over six billion hours and over 
$160 billion per year trying to comply with the law 
and pay the actual tax owed. 
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(8) Compliance with the current tax code is a 
financial hardship for employers that falls dispropor-
tionately on small businesses, which spend an aver-
age of $74 per hour on tax-related compliance, mak-
ing it the most expensive paperwork burden they en-
counter. 
(9) Small businesses have been responsible for 
two-thirds of the jobs created in the United States 
over the past 15 years, and approximately half of 
small-business profits are taxed at the current top 2 
individual rates. 
(10) The historic range for tax revenues col-
lected by the Federal government has averaged 18 
to 19 percent of Gross Domestic Product (GDP), 
but will rise to 21.2 percent of GDP under current 
law—a level never reached, let alone sustained, in 
the Nation’s history. 
(11) The current tax code is highly punitive, 
with a top Federal individual income tax rate of 35 
percent (which is set to climb to over 40 percent in 
2013 when taking into account certain hidden 
rates), meaning some Americans could face a com-
bined local, State and Federal tax rate of 50 per-
cent. 
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(12) The tax code contains harmful provisions, 
such as the Alternative Minimum Tax (AMT), which 
was initially designed to affect only the very highest- 
income taxpayers but now threatens more than 30 
million middle-class households because of a flawed 
design. 
(13) As of April 1, 2012, the United States 
achieved the dubious distinction of having the high-
est corporate tax rate (39.2 percent for Federal and 
State combined) in the developed world. 
(14) The United States corporate tax rate is 
more than 50 percent higher than the average rate 
of member states of the Organization for Economic 
Cooperation and Development (OECD)—a factor 
that discourages employers and investors from locat-
ing jobs and investments in the United States. 
(15) The United States has become an outlier 
in that it still uses a ‘‘worldwide’’ system of tax-
ation—one that has not been substantially reformed 
in 50 years, when the United States accounted for 
nearly half of global economic output and had no se-
rious competitors around the world. 
(16) The combination of the highest corporate 
tax rate with an antiquated ‘‘worldwide’’ system sub-
jects American companies to double taxation when 
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they attempt to compete with foreign companies in 
overseas markets and then reinvest their earnings in 
the United States. 
(17) The Nation’s outdated tax code has con-
tributed to the fact that the world’s largest compa-
nies are more likely to be headquartered overseas 
today than at any point in the last 50 years: In 
1960, 17 of the world’s 20 largest companies were 
based in the United States; by 2010, that number 
sank to a mere six out of 20. 
(18) The United States has one of the highest 
levels of taxation on capital—taxing it once at the 
corporate level and then again at the individual 
level—with integrated tax rates on certain invest-
ment income already reaching roughly 50 percent 
(and scheduled to reach nearly 70 percent in 2013). 
(19) The United States’ overall taxation of cap-
ital is higher than all but four of the 38 countries 
that make up the OECD and the BRIC (Brazil, 
Russia, India and China). 
(b) PURPOSES.—It is the purpose of this Act to pro-
vide for enactment of comprehensive tax reform in 2013 
that— 
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