Once again tax time is upon us – today is the deadline for filing your federal income tax. If you are like me, you spent way too much time completing your taxes this year. Our tax code and its accompanying regulations total tens of thousands of pages which are complicated, confusing, and costly to comply with. Average taxpayers should not have to pour over tax regulations for hours on end or pay a tax professional to complete their tax documents. Americans need a simple, common-sense solution. This is why I have introduced S. 1040, the Tax Simplification Act.
The Tax Simplification Act establishes a flat income tax of 17 percent on all income and places real spending limits on the federal government. My proposed flat tax would replace our current incomprehensible tax code with a flat tax rate of 17 percent on all income. The only exemptions would be a personal exemption of $12,790 for a single person; $16,330 for a head of household; $25,580 for a married couple filing jointly; and $5,510 for each dependent. These allowances would be subject to change by being indexed to inflation. To prevent the double-taxation of income, earnings from savings would not be included as taxable income. This would result in an immediate tax cut for virtually all taxpayers. Under the flat tax, businesses would pay the same 17 percent rate on the difference (if positive) between revenue and expenses. The rate of taxation would be 19 percent in the first two years and then would be lowered to the desired rate of 17 percent in the third year.
While there are numerous ideas as to how we can best reform our tax code, I believe a flat tax is not only the most efficient, but also the most equitable. Some have proposed a National Retail Sales Tax, or as it is commonly referred to, a “Fair Tax.” While I support the concept of a national sales tax, I have concerns about implementing such policies without a simultaneous repeal of the 16th Amendment to the Constitution. Under the 16th Amendment, Congress is allowed to “collect taxes on incomes, from whatever sources derived, without apportionment among the States, and without regard to any census or enumeration.” Enactment of a national sales tax without repeal of the 16th Amendment could ultimately result in Congress levying both a federal income tax and a national sales tax, creating yet a new way for the government to reach into the pockets of hardworking American citizens. My plan would work within our existing tax structure and would not require a repeal of the 16th Amendment. The flat tax would encourage savings in a more efficient manner without leaving the federal budget vulnerable to the ebb and flow of our economy.
Now is the time for significant reform of our tax code. If a flat tax were in place today, taxpayers would file a return the size of a postcard. There would be no more long hours spent poring over convoluted IRS forms. No more fees paid to professional tax assistance. The flat tax would allow taxpayers to complete their taxes quickly and easily. It would revolutionize the way our government operates. The complexities and inequities of the current tax system would end. They would be replaced by a system that treats every taxpayer equally and represents a massive reduction in the tax burden carried by hardworking Americans. Only by treating every taxpayer equally can our tax code ever achieve true fairness. When the shackles of our burdensome tax codes are removed will truly see what our great economy is capable of doing.