S.Amdt. 565

1. Inserts new text at the end of subtitle C of title V

   Inserts

   In S. 1054 · Placed on Calendar Senate

   (c) Effective Date.--The amendments made by this section shall apply to amounts paid or accrued after the date of enactment of this section in taxable years ending after such date.

   Inserted: SEC. . FLAT TAX.

   Inserted: (a) Findings.--The Senate finds the following:

   Inserted: (1) The current Internal Revenue Code, with it myriad deductions, credits and schedules, and over 17,000 pages of rules and regulations, is long overdue for an overhaul.

   Inserted: (2) The current Internal Revenue Code has over 6,900,000,000 words compared to the bible at 1,773,000 words the Declaration of Independence at 1,300 words, The Gettysburg Address at 267 words, and the Pledge of Allegiance at only 31 words.

   Inserted: (3) It is an unacceptable waste of our nation's precious resources when Americans spend more than 5,800,000,000 hours every year compiling information and filling out Internal Revenue Code tax forms. In addition, taxpayers spend $194,000,000,000 each year in tax code compliance. America's resources could be dedicated to far more productive pursuits.

   Inserted: (4) The primary goal of any tax reform is to promote growth and remove the inefficiencies of the current tax code. The flat tax will expand the economy by an estimated $2 trillion over seven years.

   Inserted: (5) Another important goal of the flat tax is to achieve fairness, with a single low flat tax rate for all individuals and businesses.

   Inserted: (6) Simplicity is another critically important goal of the flat tax, and it is in the public interest to have a ten-lined tax form that fits on a postcard and takes 10 minutes to fill out.

   Inserted: (7) A comprehensive analysis of our tax structure has concluded that a flat tax of 19 percent could be imposed upon individuals and be revenue neutral.

   Inserted: (8) If the decision is made to include deductibility on items such as interest on home mortgages and charitable contributions, the flat tax would be raised from a 19 percent to a 20 percent rate to accommodate the deductions and remain revenue neutral.

   Inserted: (9) The flat tax would tax business at a 20 percent rate on net profits and be revenue neutral and lead to investment decisions being made on the basis of productivity rather than for tax avoidance.

   Inserted: (10) The flat tax would lead to the elimination of the capital gains tax. This would become a powerful incentive for savings and investment--which translates into economic growth and expansion, more and better jobs, and raising the standard of living for all Americans.

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   Inserted: (11) The flat tax would lower the cost of capital by allowing businesses to write off the cost of capital purchase in the same year the purchase was made as opposed to complying with complicated depreciation schedules.

   Inserted: (12) By eliminating the double tax on dividends, the flat tax eliminates the distortions in the tax code favoring debt over equity financing by businesses.

   Inserted: (13) The flat tax would eliminate the estate and gift tax. With the elimination of the estate and gift tax, family-held businesses will be much more stable under the flat tax system.

   Inserted: (14) As tax loopholes are eliminated and the tax code is simplified, there will be far less opportunity for tax avoidance and fraud, which now amounts to over $120 billion in uncollected revenue annually.

   Inserted: (b) Sense of the Senate.--It is the sense of the Senate that--

   Inserted: (1) the Senate Finance Committee and the Joint Economic Committee should undertake a comprehensive analysis of flat tax proposals, including appropriate hearings and consider legislation providing for a flat tax.

   Original wording

   At the end of subtitle C of title V add the following:

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As printed