America has a progressive income tax system in which those with higher incomes are taxed more than those whose incomes are lower. This system uses margins, or tax brackets, to determine the percentage of income a person or company must pay. One IRS Commissioner has admitted the complexity of our tax code contributes to both honest mistakes and tax evasion, saying he employs professionals to prepare his own returns. Critics claim our tax system is unfair because it excessively burdens our wealthy. They say that a flat or fair tax system, which eliminates double taxation and the capital gains tax, would help create a prosperous economy and benefit us all. Supporters of our current system say that progressive taxation concurs with our nationâ€™s values. They claim it is the fairest system because it taxes people on their ability to pay, adding that higher taxes on our wealthy do not diminish their comfort or lifestyle as they do on our poor. Some wish to replace our progressive tax system with a flat or fair tax.
A Flat Tax system taxes all incomes at the same percentage rate, while a Fair Tax system replaces the income tax with a national sales tax. Advocates of a flat taxation system have suggested a tax rate of 17%, meaning a person making $50,000 or $5 million would both pay 17% of this amount in taxes. This taxation system would eliminate the exemptions and deductions, including the mortgage interest deduction, which exists in our current tax code. For this reason, most people would not need to hire professionals to help complete their tax return. This would save an estimated 6 billion hours that Americans spend preparing returns each year. Opponents of the Flat Tax claim it is still an income tax, still rewards companies for offshoring jobs to places with lower taxes, and favors the wealthy because it doesnâ€™t tax accumulated wealth even when spent.
A Fair Tax system eliminates all individual and corporate federal income taxes and abolishes the IRS. It creates a national sales tax which would generate enough revenue to fund the federal government. It has been suggested the sales tax rate of a Fair Tax would be about 23% and would be charged on all consumer products – with some protection provided for the poor. Opponents of a Fair Tax system say that a 23% tax on everything purchased would create a huge black market for untaxed products and encourage widespread bartering. Such tax evasion would likely lead to an increase in the sales tax rate. Opponents also warn that tax rates for both the flat and fair tax systems could be raised very easily.
H.R.25 Fair Tax Act of 2003
H.R.1040: Flat Tax Act
I oppose reforming current Fair and Flat tax policy and wish to defeat H.R.25 and H.R.1040
I support repealing the income tax, employment tax, and estate and gift tax; imposing a national sales tax on the use or consumption of taxable property or services, setting the sales tax rate at 23% in 2015, with adjustments to the rate in subsequent years; allowing exemptions from the tax for property or services purchased for business, export, or investment purposes, and for state government functions; allowing a monthly sales tax rebate for families meeting certain size and income requirements; directing the Secretary of the Treasury to allocate sales tax revenues among the general revenue, the old-age and survivors insurance trust fund, the disability insurance trust fund, the hospital insurance trust fund, and the federal supplementary medical insurance trust fund; prohibits the funding of the IRS after 2017, and wish to pass H.R.25
I support authorizing an individual or a person engaged in business activity to make an irrevocable election to be subject to a flat tax (in lieu of the existing income tax provisions) of 19% for the first two years after an election is made, and 17% thereafter; calculating taxable income for individual taxpayers by subtracting a basic standard deduction and an additional standard deduction for each dependent from the total of wages, retirement distributions, and unemployment compensation repealing the estate, gift, and generation-skipping transfer taxes; requiring a two-thirds vote of the House of Representatives or the Senate to increase the flat tax rate proposed by this Act or to reduce the amount of the standard deduction or business-related deductions allowed by this Act, and wish to pass H.R.1040