Longer Taxable Under The Flat Tax System example essay topic

106th Congress 1st Session H.R. 5 IN THE HOUSE OF REPRESENTATIVES OCTOBER 19 TH, 1999 Introduced the following bill in which was referred to the Committee on A BILL To tax income once and only once at a single rate. 1. Be it enacted by the Senate and the House of Representatives of the 2. United States of America in Congress assembled. 3. SECTION 1.

THE TITLE 4. This Act may be cited as the " Flat Tax Bill". 5. SECTION 2.

THE BILL 6. The flat tax replaces the current income tax code, which is very 7. complex, with a system so simple Americans could file their taxes on a 8. form the size of a postcard. What exactly is a flat tax? A flat tax sets 9. into place a single tax rate on all income subject to tax.

The hundreds of 10. exemptions, credits, loopholes and deductions now in the tax system 11. would be eliminated to make the single tax rate as low as possible. The 12. cost of using the current tax system totals about $200 billion annually, 13. or $700 for every man, woman, and child in America. A flat tax would 14. reduce those totals by 94%, saving taxpayers more than $100 15. BILLION in compliance costs each year. Even with the reduced tax 16. rate, it is still possible to provide revenue to cover the cost of 17. government. America has the right to demand that our tax system be 18. profitable, efficient, and allow our nation to reach its peak economic 19. growth potential.

The flat tax system would end unfairness and 20. economic damage caused by the current income tax system. The flat 21. tax system would also replace the piles of tax forms (480 to be exact) 22. the IRS publishes. Individuals with saving and investment would be 23. free from double taxation. If a house or small business was sold the 24. capitol gains could not be taxed.

Interest rates on home mortgages, 25. credit cards, and auto loans would be reduced since interest income is 26. no longer taxable under the flat tax system. Hardworking families who 27. work longer or harder to improve their standing of living would no 28. longer be punished. With only one low tax rate, government would no 29. longer take an increasingly larger chunk of someone's income. One tax 30. rate means a spouse's income could no longer push a family into a 31. higher tax bracket. The benefits of the flat tax system would not only 32. be seen and felt by individuals, but by businesses as well. The flat tax 33. system eliminates the cost of keeping track of all interests and 34. dividends paid out because this income would only be taxed at the 35. business level.

The Alternative Minimum Tax (AMT), which forces 36. business to calculate their taxes twice under two different methods 37. would no longer be needed. If enacted the tax rate will be set at the 38. equal and constant rate of 13.1% annually with no deductions. The flat 39. tax system would be put into effect on January 1st, 2001 to allow for the 40. necessary preparation. Since the passage of the Sixteenth Amendment 41. in 1913, the income tax system has been changed and reformed causing 42. it to become distorted. Replacing the current income tax system with a 43. flat tax would increase economic growth and opportunity while giving 44. all Americans a higher standard of living. The time has come for a flat 45. tax system that is simple and profitable.