Posted 2/3/2013
Sen. Richard Shelby is pushing legislation that would replace today’s income tax code with a 17 percent flat tax and reduce tax returns to the size of a postcard.
“Our tax code and regulations total tens of thousands of pages that are complicated and confusing,” the Alabama Republican said in a statement posted on the votesmart.org website.
“That is why I have introduced the SMART Act — the Simplified, Manageable And Responsible Tax Act.
“The time has come to put an end to the headaches caused by our inefficient tax code.”
Shelby introduced flat tax legislation in 2011, and on Tuesday introduced a new bill with updated figures.
The new bill imposes a flat tax of 17 percent on all personal and business income. The only exemptions would be these personal exemptions:
- $14,070 for a single person
- $17,970 for a head of household
- $28,140 for a married couple filing jointly
- $6,070 for each dependent
The exemptions would be indexed to the consumer price index to prevent inflation from increasing the tax burden, and earnings from savings would not be included as taxable income, “resulting in an immediate tax cut for virtually all taxpayers,” the statement from Shelby’s office states.
“With the SMART Act in place, taxpayers would file a return the size of a postcard.”
The legislation would also eliminate estate taxes, gift taxes, and the Alternative Minimum Tax, and allow businesses to redirect resources away from tax compliance and toward job creation.
The statement concludes: “By closing loopholes for individuals and businesses, the SMART Act would create broad-based lower tax rates that would give American individuals and businesses a competitive edge, create and retain jobs in the United States, and curb offshoring.”