TAXES »» TAXES »» FLAT TAX »» May 15, 2023

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. Some claim it is the fairest system because it taxes people on their ability to pay, while others 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. Opponents warn that tax rates for both of these tax systems could be raised very easily. 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 doesn’t tax accumulated wealth even when spent. Proposed Legislation: Reintroduction of H.R.1040 - Flat Tax Act (117th Congress 2021-2022) Prospective Sponsor: Rep. Michael Burgess (TX) I oppose reforming current flat tax policy and wish to donate resources to the campaign committee of Speaker Kevin McCarthy (CA). I support: 1.) Authorizing an individual or a person engaged in business activity to make an irrevocable decision to be subject to a flat tax of 19% for the first two years after an election is made, and 17% thereafter. 2.) 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. "Business taxable income" is gross active income reduced by certain deductions for the cost of business inputs, wages, and retirement contributions. 3.) Imposing an employer tax on the value of excludable compensation provided to employees not engaged in business activity of 19% for the first two years after a decision is made under this bill and 17% thereafter. 4.) Repealing the estate, gift, and generation-skipping transfer taxes. 5.) Requiring a two-thirds vote of the House of Representatives and the Senate to increase the flat tax rate proposed by this bill or to reduce the amount of the standard deduction or business-related deductions allowed by this bill. And wish to donate resources to the campaign committee of Rep. Michael Burgess (TX) and/or to an advocate group currently working with this issue.

Winning Option »» I support: 1.) Authorizing an individual or a person engaged in business activity to make an irrevocable decision to be subject to a flat tax of 19% for the first two years after an election is made, and 17% thereafter. 2.) 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. "Business taxable income" is gross active income reduced by certain deductions for the cost of business inputs, wages, and retirement contributions. 3.) Imposing an employer tax on the value of excludable compensation provided to employees not engaged in business activity of 19% for the first two years after a decision is made under this bill and 17% thereafter. 4.) Repealing the estate, gift, and generation-skipping transfer taxes. 5.) Requiring a two-thirds vote of the House of Representatives and the Senate to increase the flat tax rate proposed by this bill or to reduce the amount of the standard deduction or business-related deductions allowed by this bill. And wish to donate resources to the campaign committee of Rep. Michael Burgess (TX) and/or to an advocate group currently working with this issue.

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