The purpose of this web page is to objectively note reports and websites related to tax reform and provide links to further information from members of Congress and others. The focus is on federal tax reform, but there are also links to some state tax reform activities.
Compiled by Professor Annette Nellen
**Visit Professor Nellen's 21st Century Taxation Blog - click here**
Tax Reform Hearings in the 118th and 117th and prior Congresses
Overview & Comparison of Tax Proposals in President Biden's Greenbooks FY2022 and FY2023 - here
IRS Stats website
Joint Comimttee on Taxation tax expenditure reports
Table comparing concepts, principles, proposals and items analyzed from reports of President Obama' Administration (Nellen)
Explanation of tax reform ideas and goals form FY2015 budget, including explanation of tax proposals - here
White House and Treasury Department, The President's Framework for Business Tax Reform, April 2016 (update of Feb 2012 report).
General Explanations of the Administration's Revenue Proposals for current and prior fiscal years ("Greenbook").
Senator Baucus Discussion Drafts: links below may be outdated - try this one - here
International Proposal (11/19/13) - Option Y Option Z Provisions Common to Y & Z summary 1-pager JCT report
Administrative Proposals (11/20/13) - full text summary 1-pager JCT report
Cost Recovery and Accounting Proposals (11/21/13) full text summary 1-pager JCT report
Energy Tax Reforms (12/18/13) full text summary 1-pager JCT report
Congressman Camp's Discussion Drafts:
Congressmen Camp and Levin Tax Reform Working Groups (Feb 2013) - here
Joint Committee report for the working groups - JCS-03-13 (5/6/13)
Senate Finance Committee's Tax Reform Option Papers (2013) - Families and Business Simplification /
Senator Baucus and Senator Hatch call for a "blank slate" approach inviting people to tell them why any special tax rule should remain (6/27/13 press release)
OECD, Restoring Fairness to the Tax System, April 2013.
GAO, Guide for Evaluating Tax Expenditures (GAO-13-167SP)
GAO, Tax Expenditures: IRS Data for Evaluations are Limited (2013) GAO-13-516 (5/15/13)
GAO, Effective Tax Rates Can Differ Significantly from the Statutory Rate, GAO-13-520 (5/30/13)
CBO, The Distribution of Major Tax Expenditures in the Individual Income Tax System (5/29/13) - Prof. Nellen blog post
CRS, A Brief Overview of Business Types and Their Tax Treatment, by Keightley (6/12/13)
EY, Macroeconomic Effects of Lower Corporate Income Tax Rates Recently Enacted Abroad, prepared for RATE, March 2013
EY, Macroeconomic analysis of a revenue-neutral reduction in the corporate income tax rate financed by an across-the-board limitation on corporate interest expenses, prepared for BUILD Coalition, July 2013
Business Roundtable, Comprehensive Tax Reform: The Time in Now, 7/22/13
PwC, Evolution of Territorial Tax Systems in the OECD, prepared for The Technology CEO Council (4/2/13).
Letter from JCT staff to committee Democrats with the JCT data on what it takes to get to a 28% corporate rate (November 2, 2011)
Administration's Tax Proposals:
Table comparing concepts, principles, proposals and items analyzed from reports of President Obama' Administration
White House and Treasury Department, The President's Framework for Business Tax Reform, Feb 2012 + April 2016 update
OMB, Living Within Our Means and Investing in the Future - The President’s Plan for Economic Growth and Deficit Reduction, Sept. 2011
Links to "Greenbooks" for current and past years - here. (President's tax proposals that are included in the budget proposals)
President Obama's Deficit Commission - here
President Obama's PERAB tax panel report - here
JCT, CBO, GAO and other government reports related to tax reform:
JCT, Present Law and Historical Overview of the Federal Tax System (JCX-1-11; 1/18/11)
CBO, Reducing the Deficit: Spending and Revenue Options(March 2011)
GAO, Guide for Evaluating Tax Expenditures (GAO-13-167SP)
GAO, Tax Expenditures: IRS Data for Evaluations are Limited (2013)
CBO, The Distribution of Major Tax Expenditures in the Individual Income Tax System (5/29/13) - Prof. Nellen blog post
CBO, Spending and Revenue Options (3/11) - here
National Taxpayer Advocate reports calling for tax reform: 2012 and 2010 to Congress ("The Time for Tax Reform is Now" (pdf))
National Commission on Fiscal Responsibility and Reform (President Obama's Deficit Commission)
Final report (12/1/10) - while it did not get the required 14 votes of the 18 commissioners, the report exists for discussion purposes and it did get bipartisan support on the Commission
Tax proposals are on pages 28-35 of the final report
Website of the Commission (formed by President Obama in February 2010)
Senate Budget Committee hearing on the report - 3/9/11
President Obama's 1/25/11 State of the Union address calling for a lower corporate tax rate and eliminating "loopholes" - here
President Obama's Tax Reform Task Force chaired by Paul Volcker:
Final report released in August 2010 (was due 12/09) + White House blog post
Tax Analyst's collection of 32 commissioned essays with suggestions for the task force (9/09) - Towards Tax Reform
President Bush's Advisory Panel on Federal Tax Reform (panel's website with final report (11/1/05) and testimony) - there are some interesting ideas and data in here - it is worth keeping at the forefront in continuing tax reform discussions
Annette Nellen - Brief overview to tax reform and Panel's proposals - outline + slides
Leonard E. Burman and William G. Gale, "A Preliminary Evaluation of the Tax Reform Panel's Report," Tax Notes 12/5/05
Treasury Department reports on business competitiveness:
Ernst & Young, The Flow-Through Sector and Tax Reform (2011)
Legislative proposals (sampling) and hearings of the 117th, 116th, 115th, 114th, 113rd, 112th, 111th and 110th Congresses:
HEARINGS - A variety of hearing either directly on tax reform or related topics (such as health care reform or small business reform) were held in the 110th Congress. Some of the hearings in the Senate Finance Committee were labeled as being in anticipation of tax reform. So it looks like the topic will get more attention in 2009. Part of the reason for the interest is the expiring 2001 and 2003 tax cuts, AMT problems, the tax gap and international competitiveness.
List with links to key tax reform related hearing of the 117th Congress or 116th Congress or 115th Congress or 114th Congress or 113th Congress or 112th Congress or 111th Congress or 110th Congress.
113th Congress (see links above for later congresses)
Congressmen Camp and Levin Tax Reform Working Groups (Feb 2013) - here
JCT, Present Law, Data, And Analysis Relating To Tax Incentives For Residential Real Estate, JCX-10-13 (April 22, 2013)
GAO, Information on Estimated Revenue Losses and Related Federal Spending Programs, GAO-13-339 (3/18/13)
CRS, Tax Reform in the 113th Congress: An Overview of Proposals (3/24/14)
CRS, The Corporate Income Tax System: Overview and Options for Reform (2/14/14)
CRS, Energy Tax Policy in the 113th Congress, (12/17/13)
CRS, Tax Reform in the 113t Congress: An Overview of Proposals (5/6/13)
CRS, The Challenge of Individual Income Tax Reform: An Economic Analysis of Tax Base Broadening, by Jane G. Gravelle and Thomas L. Hungerford, 3/22/12
H.R. 25 (113rd Congress) - Fair Tax of 2013
H.R. 1040 (113rd Congress) - the Flat Tax
H.R. 1579 calling for a financial transaction tax
112th Congress
CRS, The Corporate Income Tax System: Overview and Options for Reform, by Keightley and Sherlock, 9/13/12
CRS, The Challenge of Individual Income Tax Reform: An Economic Analysis of Tax Base Broadening, by Gravelle and. Hungerford, March 22, 2012
CRS, Tax Reform Options: Incentives for Capital Investment and Manufacturing (1/11)
CBO, Reducing the Deficit: Spending and Revenue Options (March 2011)
CRS, Reform of US International Taxation: Alternatives (12/10)
CRS, The Bush Tax Cuts and the Economy (12/10)
H.R. 25, Fair Tax Act of 2011 - national retail sales tax to replace income, payroll and estate/gift taxes; 23% tax inclusive rate
H.R. 86 - End Tax Uncertainty Act of 2011 - "To prevent pending tax increases, permanently repeal estate and gift taxes, and permanently repeal the alternative minimum tax on individuals, as for other purposes."
H.R. 99, Fair and Simple Tax Act of 2011 - lowers individual and corporate rates, repeals estate/gift taxes, makes 2001/2003 tax cuts permanent, 10% capital gains tax rate, permanent research credit and AMT patch, and other changes
H.R. 934 - provides for a flat corporate tax rate of 18% with no other changes
H.R. 1040, Freedom Flat Tax Act - an elective flat tax for individuals and other changes
H.R. 6169, Pathway to Job Creation through a Simpler, Fairer Tax Code Act of 2012 (call for tax reform in 2013 and reasons why) Passed 8/2/12 by 232 - 189
H.J.Res. 34 - calling for progressive taxation
Senator Snowe press release and resolution opposing treating businesses as corporations - S. Res. 88
S. 727 (Wyden) - Bipartisan Tax Fairness and Simplification Act of 2011 Information from Senator Wyden
Senator Rockefeller proposal: explanation from Senator Rockefeller (6/30/11) + pdf + 21st Century Taxation blog post (7/6/11)
111th Congress:
Congressional Research Service, Tax Reform: An Overview of Proposals in the 111th Congress, March 2009
H.R. 25 and S. 296 - Fair Tax Act of 2009 - a national sales tax to replace most federal taxes (other than excise taxes)
H.R. 1040 and S. 963 - Freedom Flat Tax Act - allows taxpayers to choose to file using the flat tax sponsored by Congressman Burgess and Senator Alexander
S. 741 - Flat tax with limited deduction for cash contributions and home mortgage interest sponsored by Senator Spector
S. 932 - Flat tax similar to the Hall-Rabushka flat tax. Sponsor Senator Shelby calls it the "Simplified, Manageable, And Responsible Tax Act" or the "SMART Act"
H.R. 1557 and S. 1056 - 'Securing America's Future Economy Commission Act' or the `SAFE Commission Act' - "To establish a commission to develop legislation designed to reform tax policy and entitlement benefit programs and ensure a sound fiscal future for the United States, and for other purposes."
H.R. 1703 - "To require a study and comprehensive analytical report on transforming America by reforming the Federal tax code through elimination of all Federal taxes on individuals and corporations and replacing the Federal tax code with a transaction fee-based system."
H.R. 4529 - Congressman Paul Ryan's Roadmap for America's Future - sponsor's website
Senators Wyden and Gregg Bipartisan Tax Fairness and Simplification Act of 2010 (S. 3018) - proposal's website
21st Century Taxation post: 2/24/10
Tax Policy Center analysis (5/24/10)
110th Congress:
Congressional Research Service report on Tax Reform: An Overview of Proposals in the 110th Congress (1/08)
H.R. 4159 - Simplified USA Tax Act
H.R. 3970 (Rangel) - proposal that lowers corporate rate and repeals individual AMT
H.R. 1040 - Freedom Flat Tax
H.R. 25 - Fair Tax Act (national sales tax)
H.R. 15 - National Health Insurance Act (Dingell) - calls for a 5% VAT
H.R. 3818 - the Taxpayer Choice Act of 2007 - repeals the individual AMT and gives taxpayers a choice of filing systems: the current one with its various deductions and credits, or a simplified one with a 2 rate structure and deductions only for personal and dependency exemptions and a standard deduction. Also see information from the Republican Study Committee.
H.R. 473 - "To establish a commission to develop legislation designed to reform tax policy and entitlement benefit programs and ensure a sound fiscal future for the United States, and for other purposes." The commission would be called the Securing America's Future Economy (SAFE) Commission.
S. 55 - To repeal the individual AMT starting in 2007. While this might not sound like tax reform, it affects a lot of individuals and will likely require some significant changes to cover the revenue effect or repeal.
S. 96 - "A bill to amend the Internal Revenue Code of 1986 to ensure a fairer and simpler method of taxing controlled foreign corporations of United States shareholders, to treat certain foreign corporations managed and controlled in the United States as domestic corporations, to codify the economic substance doctrine, and to eliminate the top corporate income tax rate, and for other purposes."
Congressional (older):
House Ways & Means Committee, Hearing on the Impact of International Tax Reform on U.S. Competitiveness (6/22/06)
Our Business Tax System: Objectives, Deficiencies, and Options for Reform (9/26/06)
Hearing on the Impact of International Tax Reform on U.S. Competitiveness (6/22/06)
'
Tax Gap Concerns:
Why is major federal tax reform a regular discussion topic? What are the typical goals for tax reform? Click here.
What is a consumption tax? By "major" federal tax reform, the sponsors generally mean that the federal income tax (and perhaps other federal taxes, such as payroll taxes and estate and gift taxes) would be replaced with a consumption tax. Today in the U.S., consumption taxes are only used by state and local governments - the sales tax. For the answer to the question, what is a consumption tax? - click here.
Tax Reform in the U.S., by Annette Nellen, July 1999 - overview to current U.S. system, recent reforms, major reform proposals and current tax issues.
AICPA's Understanding Tax Reform: A Guide to 21st Century Alternatives, 9/05
AICPA Tax Reform links
Analyzing Tax Proposals:
GAO
Congressional Research Service (CRS) reports (or search here for more reports)
CRS, The Challenge of Individual Income Tax Reform: An Economic Analysis of Tax Base Broadening, by Jane G. Gravelle and Thomas L. Hungerford, 3/22/12
International Corporate Tax Rate Comparisons and Policy Implications by Jane Gravelle (3/31/11)
Should the U.S. Levy a Value-Added Tax for Deficit Reduction? (3/22/11)
Tax Reform: An Overview of Proposals in the111th Congress
by James M. Bickley (3/5/09)Value-Added Tax: A New Federal Revenue Source, by James M. Bickley (8/22/06)
A Value-Added Tax Contrasted with a National Sales Tax, by James M. Bickley (2/08)
The Flat Tax, Value-Added Tax, and National Retail Sales Tax: Overview of the Issues, by Gregg A. Esenwein and Jane G. Gravelle, September 2004
Consumption Taxes and the Level and Composition of Saving, by Steven Maguire, January 2001
Flat Tax Proposals and Fundamental Tax Reform: An Overview, by James M. Bickley (9/04)
Value-Added Tax as a New Revenue Source, by James M. Bickley (8/06)
Effects of Flat Taxes and Other Proposals on Housing: An Overview, by Jane G. Gravelle, June 1996.
Joint Committee on Taxation reports on the flat tax and other tax reform proposals:
Congressional Budget Office reports on tax reform and related topics: Click here for all CBO reports on taxes.
Sources of the Growth and Decline in Individual Income Tax Revenues Since 1994 (5/08)
Background Paper: Computing Effective Tax Rates on Capital Income (12/06)
Background Paper: Differences in Wage and Salary Income Included in Various Tax Bases (6/05)
Testimony on the Individual AMT (5/05) - not specifically on tax reform, but provides an example of why some reform is needed
Testimony on the Tax Code’s Impact on the Reliability of Revenue Projections (7/22/04)
Federal Income Tax Reform: A Review of Two Proposals (10/84)
AICPA Tax Policy Concepts Statement - helpful in understanding the debate - also try http://www.aicpa.org/taxreform
Tax Foundation
Fundamental Tax Reform: The Experience of OECD Countries, by Jeffrey Owens, OECD (Feb 2005)
Center on Budget and Policy Priorities (CBPP)
Six Tests for Corporate Tax Reform (2/24/12)
Historical reports
Treasury, Blueprints for Basic Tax Reform, January 17, 1977
Treasury, Tax Reform for Fairness, Simplicity, and Economic Growth: The Treasury Department Report to the President, Nov. 1984 - Volume 1 / Volume 2 / Volume 3 (VAT)
Treasury, The President’s Tax Proposals to the Congress for Fairness, Simplicity, and Growth, May 1985
Treasury, Integration of the Individual and Corporate Tax Systems: Taxing Business Income Once, Jan. 1992
Treasury, A Recommendation for Integration of the Individual and Corporate Tax Systems, Dec. 1992
Complete list of Treasury Department Tax Reform Reports - here
Examples of What Some States or State Organizations Have Done to Evaluate Their State Tax System and Possible Reforms:
NCSL list of state activities
CBPP - State Tax Expenditure Reports and Information in General
ITEP report - The ITEP Guide to Fair State and Local Taxes (March 2011)
Arizona (2003)
Guiding Principles from Arizona's Citizen's Finance Review Commission - and another version
California
Commission on the 21st Century Economy - formed by Governor and legislature 10/08
Information from the Commission on Tax Policy in the New Economy. Final report (12/03).
District of Columbia - May 2014 report of the DC Tax Revision Commission
Information on sales tax changes made within a few months of the final report - OTR Notice: 2014-09
Georgia
Special Council on Tax Reform and Fairness, January 2011
Hawaii - see links here
Indiana Tax Credit Task Force Report (Dec. 2011)
Iowa State Iindustrail Processing Exemption Study Committee Annual Reports
Kentucky Report of the Blue Ribbon Commission on Tax Reform (2012) + ppt summary
Kentucky Competes, Feb 2014, from the governor
Maine, Final Draft Report of the Tax Expenditure Review Task Force (PDF) Dec 2013
Maryland Business Tax Reform Commission (12/10) - here
Massachusetts - final report of Study Commission on Corporate Taxation (12/07)
Report on Michigan's Single Business Tax (which is a subtraction method VAT), July 2002
Minnesota - report issued 2/09. There are some very interesting ideas here, all explained in the context of the need to modernize the tax system; background reports are also very interesting.
Missiouri State Tax Commission annual Report - 2011
New York
Governor Cuomo's Tax Reform Plan (January 2014)
Corporate Tax Reform, NY Dept. of Taxation and Finance, 7/09
Select Committee on Budget and Tax Reform, 7/09 - overview + staff report
Ohio - significant reform enacted effective July 1, 2005 Reform Committee report. (3/03)
Oklahoma (2001)
Oregon (2009) - final report of Task Force on Comprehensive Revenue Restructuring
South Carolina Taxation Realignment Commission (12/10) - here
Vermont Blue Ribbon Tax Structure Commission, January 2011
Washington (2002)
Wyoming (1999)
Other Countries
Australia’s Future Tax System Review Panel- final report issued in December 2009
UK - Tax Matters - Reforming the Tax System, commission report (10/06)
H.R. 1040 (113rd Congress) - the Flat Tax
H.R. 1040 and S. 963 - Freedom Flat Tax Act - allows taxpayers to choose to file using the flat tax sponsored by Congressman Burgess and Senator Alexander
S. 741 - Flat tax with limited deduction for cash contributions and home mortgage interest sponsored by Senator Spector
H.R. 1040 (110th Congress, Burgess) - Freedom Flat Tax
H.R. 1040 (109th Congress, Burgess) - similar to the "Armey" flat tax, see below.
S. 1040 (108th Congress, Shelby) - A flat tax proposal like the ones he and former Congressman Armey have introduced in prior years (based on the Hall-Rabushka model). The rate would be 19% until 2005 when it would be 17%. It also calls for a 3/5 majority vote for any tax increase or reduction in the standard deduction or change that would reduce federal revenues.
S. 907 (108th Congress; Spector) - Like Congressman Armey's flat tax, the one of Senator Spector is modeled after the Hall-Rabushka flat tax. S. 907 calls for a 20% flat tax on earned income of individuals less a standard deduction, deduction for cash contributions (limited to $2,500) and home acquisition mortgage interest (limited to $100,000 of debt). The standard deduction would be $17,500 for married couples filing jointly, $15,000 for head-of-household, and $10,000 for individuals. A dependency deduction of $5,000 per dependent would be included as part of the standard deduction. The standard deduction would be adjusted annually for the effects of inflation.
All forms of business would be subject to a 20% flat tax on their business taxable income which is "gross active income" less specified deductions. Gross active income excludes investment income. Allowable business deductions are business inputs (cost of goods sold, cost of services provided and reasonable travel and entertainment) compensation paid to employees, and the cost of personal and real property used in the business. Excess deductions could be carried over to future tax years.
No tax credits are provided. Estate and gift taxes would be repealed.
Per Senator Spector: "This flat tax would enable us to scrap the great majority of the IRS rules, regulations, and instructions and delete most of the 6.9 million words in the Internal Revenue Code. Instead of billions of hours of non-productive time spent in compliance with, or avoidance of, the tax code, taxpayers would spend only the small amount of time necessary to fill out a postcard-sized form. Both business and individual taxpayers would thus find valuable hours freed up to engage in productive business activity or for more time with their families instead of poring over tax tables, schedules, and regulations." [Cong. Record, 4/11/03, S5363]
S. 1054 - Amendment 569 (Spector) - calls for a Sense of the Senate resolution that "the Senate Finance Committee and the Joint Economic Committee should undertake a comprehensive analysis of simplification including flat tax proposals, including appropriate hearings and consider legislation providing for a flat tax."
Senator Spector suggests that a 19% flat tax (20% rate if mortgage interest and charitable deductions are allowed) would "expand the economy by an estimated $2 trillion over seven years."
On May 15, 2003, the Senate agreed by a vote of 70-30 to add the above amendment to S. 1054. S. 1054 became a substitute for H.R. 2 which passed in the Senate 51-49 on May 15, 2003.
Congressman Armey reintroduced his flat tax proposal (H.R. 1040, 107th Congress) which is based on the Hall-Rabushka flat tax model. Congressman Armey previously introduced this bill in the 103rd, 104th, 105th and 106th Congress.
Information from those in favor of a flat tax:
The Flat Tax by creators Drs. Hall and Rabushka of the Hoover Institute at Stanford
Information from those opposed to a flat tax:
Citizens for Tax Justice - 5/17/95 congressional testimony
Senator Spector reintroduced his proposal to replace the income and estate and gift taxes with a 20% flat tax based on the Hall-Rabushka model, but with limited deductions for mortgage interest (on $100,000 of acquisition debt) and charitable contributions ($2,500 of cash contributions). This legislation (S. 593; 105th Congress) is a more detailed proposal than his proposal introduced in the 104th Congress (S. 488).
Congressman Souder reintroduced his flat tax proposal (H.R. 2971 of 105th Congress, and H.R. 1780 of 104th Congress). Modified version of Armey flat tax. Calls for a 20% rate on earned income with a large standard deduction, charitable contribution per Sec. 170 and mortgage interest deduction limited to interest on $100,000 of acquisition debt. Businesses would be taxed at 20% rate on gross active income reduced by cost of busienss inputs, compensation and cost of tangible personal and real property used in the business activity. Unlike Spector flat tax on individuals, Souder flat tax does not limit the charitable contribution deduction (appears to rely on current limits at Sec. 170), while Spector tax only allows for deduction up to $2,500 of cash charitable contributions. Yet, both bills call for same 20% tax rate.
Impact of the flat tax on California - a 1995 report by the Franchise Tax Board
Commentary:
Papers from organizations that favor a national sales tax:
- Cato Institute - How a sales tax would work
- Cato Institute - Economic impact of replacing the income tax with a sales tax
- Cato Institute - The Economic and Civil Liberties Case for a National Sales Tax
- Information from Americans For Fair Taxation - advocating a national sales tax
Papers from organizations that oppose a national sales tax:
- Citizens for Tax Justice - 23% National Sales Tax Doesn't Work
- Brookings Institute - William Gale:
CRS, Value-Added Tax as a Revenue Option: A Primer (2012)
3/22/11 - CRS Report, Should the U.S. Levy a Value-Added Tax for Deficit Reduction?
Tax Law Review (Vol. 63, No. 2), Symposium on Designing a Federal VAT
Value-Added Tax: A New Federal Revenue Source, by James M. Bickley (8/22/06)
A Value-Added Tax Contrasted with a National Sales Tax, by James M. Bickley (2/08)
The Flat Tax, Value-Added Tax, and National Retail Sales Tax: Overview of the Issues, by Gregg A. Esenwein and Jane G. Gravelle, September 2004
Value-Added Tax as a New Revenue Source, by James M. Bickley (8/06)
Effects of Adopting a VAT, CBO (1992)
Joint Committee on Taxation reports on tax reform - click here.
National Taxpayer Advocate report on administrative issues of a consumption tax (2009) - pages 35 - 74
Carbon Tax paper from The Tax Policy Center (2/11/13)
Simplified USA tax proposal from Congressman English (H.R. 269, 108th Congress) - consists of a subtraction type VAT for businesses and a modified income tax for individuals with limited deductions and savings incentives.
S. 112 (108th Congress, Hollings) - calls for a VAT to help fund the costs of war
Call for study to determine the effect on the government and the economy of a tax system consisting of a 10% federal consumption tax + a 10% flat income tax. H.R. 853 (105th Congress) introduced by Congressman Traficant would direct the U.S. Comptroller General to conduct the study. The 10% flat tax to be analyzed would allow for business deductions, a standard deduction, a personal exemption, mortgage interest deduction on a principal residence, and a deduction for college tuition payments.
H.R. 2685 (105th Congress) would allow individuals to elect to file a flat tax return that only allows for trade or business deductions, and standard and dependency deductions. The proposed flat rate is 20%. A dependency deduction is $5,000. The standard deduction would be $21,400 for married filing jointly, $14,000 for head of household and $10,700 for single, all to be indexed for inflation. Income of children under age 14 is included on the parent's tax return. A supermajority would be required to increase the rates or decrease the deduction amounts.
Proposal to amend the U.S. Constitution to abolish the Federal income tax by repealing the 16th Amendment - H.J. Res. 70 (105th Congress).
H.R. 2716 (107th Congress) - the "Date Certain Tax Code Replacement Act" - repeals all federal taxes other than self-employment taxes and FICA and Railroad Retirement Tax Act taxes, effective for tax years beginning after December 31, 2005, provided a new federal tax system is created by July 4, 2005. This proposal also calls for creation of a 15-member Commission to do the following
"(A) to conduct, for a period of not to exceed 18 months from the date of its first meeting, the review described in paragraph (2); and
(B) to submit to the Congress a report of the results of such review, including recommendations for fundamental reform and simplification of the Internal Revenue Code of 1986, as described in subsection (g).
(2) REVIEW- The Commission shall review--
(A) the present structure and provisions of the Internal Revenue Code of 1986, especially with respect to--(i) its impact on the economy (including the impact on savings, capital formation and capital investment);
(ii) its impact on families and the workforce (including issues relating to distribution of tax burden);
(iii) the compliance cost to taxpayers; and
(iv) the ability of the Internal Revenue Service to administer such provisions;(B) whether tax systems imposed under the laws of other countries could provide more efficient and fair methods of funding the revenue requirements
of the government;
(C) whether the income tax should be replaced with a tax imposed in a different manner or on a different base; and
(D) whether the Internal Revenue Code of 1986 can be simplified, absent wholesale restructuring or replacement thereof."
Joint Committee on Taxation - Options to Improve Compliance and Reform Tax Expenditures (1/05)
Simplification Options - Joint Committee on Taxation report as requested by Congress (4/01) - Volumes 1 2 3
To obtain copies of the bills listed above:
This page last revised on September 3, 2023.
Any views and opinions expressed in this page are strictly those of Professor Annette Nellen. The contents of this page have not been reviewed or approved by San Jose State University.
Last Modified: Sep 3, 2023