You are on page 1of 1

Davis/ 4 – Senator Garrigan​

S.S.S._____

A BILL
To implement a federal flat rate tax on American citizens personal incomes.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE
This act may be cited as the Flat Tax Act of 2016.
SECTION 2. FINDINGS
Congress hereby finds and declares that,
1) The current tax system is widely viewed as complex, thereby reducing the ability of individuals to understand and
comply with tax laws. To the extent that a tax system is not simple and efficient, it imposes costs on taxpayers
beyond the payments they make to the U.S. Treasury.
2) Flat taxes are also supported in the business and investment communities since dividends, distributions, capital
gains and other income not tied to wages are generally exempt from tax: this should spur investment and savings
3) It is possible that these simpler and clearer processes will mean more revenue is collected as a consequence of
more people complying with their ​tax​ obligations
4) Our current income tax system is inefficient from an economic perspective. It places a significant amount of
double-taxation on saving and investment.
5) The top ​1 percent of earners in America paid 24 percent of all Federal Income Tax generated in 2011​, while the
top 10 percent paid 68 percent.
6) ​One tax rate makes for easy computation by the Internal Revenue Service and straightforward payments from
taxpayers
7) ​The flat tax eliminates global taxation and allows the United States to compete more evenly in global markets
8) ​This tax system does not discriminate based on income level; everyone pays the same percent of income.
9)​ ​In FY 2014, the ​IRS​ processed more than 199 million tax returns.
10) ​ A good tax policy is important to generate revenue for business and also because the penalty for a poorly
received tax system on a global scale may be substantial and long-term. The flat tax eliminates global taxation and
allows the United States to compete more evenly in global markets.

SECTION 3. STATUTORY LANGUAGE
A) The Internal Revenue service will remain as the overseer and enforcer over the tax collecting process. The agency
will see a $230 million budget cut at the beginning of the 2017 fiscal year due to the fact that a flat tax seriously
reduces the need for the services of the IRS. This budget cut will be aimed at shrinking various branches of the IRS
and reducing the size of offices nationwide.
B) This bill will put in place a 17% flat tax rate on American citizens’ income alone in an effort to simplify the
taxation process, as well as provide equality for Americans. Families and individuals are not required to report
dividends, interest or other business-related income because it will serve no purpose for their personal taxes; this
income is taxed at the business level. Businesses would not pay the same flat rate of 17%, but instead pay a business
tax that is not covered in this bill. It removes the section of the tax code that is biased against the formation of capital,
and eliminates the death tax, capital gains tax and double taxation of savings and dividends.
C) Families below the poverty line will be exempt from the Flat Tax Act of 2016; Noticing the poverty line as an
annual income of less than $11,880 for one person and $24,300 for a family of four. However, all individuals and
households with a qualifying income will be held responsible for complying with the tax code, and failure to do so
will result in the consequences stated in the current tax code.