Tax Reform

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Fair, Flat Tax Act | Related Statements

When I talk to people on the "El" or at local grocery stores during my Congress On Your Corner office hours, they often share their frustration with the tax system. They believe the tax system is too complex and unfair, and they're right. The tax code has become so complicated and inefficient that it has created a culture of cheating and rampant tax avoidance. In 2001, $345 billion in taxes went unpaid. As a result, middle class taxpayers are left to pick up the slack for those who don't pay their fair share.

We need a comprehensive fix to the problems facing our tax code. Senator Ron Wyden of Oregon and I have proposed the Fair, Flat Tax Act in order to make sure that the tax code works for everyone. This page contains information on some of the initiatives I've been working on to help simplify the tax code.

Additionally, for information on the free tax return and FAFSA clinics my office has been hosting, please click here or on the thermometer at right.

Fair, Flat Tax Act

Along with Senator Ron Wyden of Oregon, I have proposed the Fair, Flat Tax Act to simplify the tax code and provide meaningful tax relief to middle class families. Specifically, my proposal:

• Condenses the 1040 form to one simple page.
• Replaces six tax brackets with three rates of 15%, 25% and 35%.
• Closes the gap between the high tax rate for wages and salaries and the low tax rate for capital gains and dividends.
• " Provides higher standard deductions for every taxpayer, including tripling the standard deduction for single filers from $5,000 to $15,000 and raising it from $10,000 to $30,000 for married couples
• Eliminates the Alternative Minimum Tax for everyone.

The Fair, Flat Tax Act would eliminate tens of billions of dollars each year in special breaks for corporations, and direct the Treasury Secretary to identify and report to Congress an additional $10 billion in savings from tax expenditures that subsidize inefficiencies in the health care system. Eliminating these breaks will allow the code to sustain current benefits for our men and women in uniform, our veterans and the elderly and disabled - as well as tax incentives that promote savings and help families pay for health care.

Additionally, the Fair, Flat Tax Act is fiscally responsible. According to the non-partisan Congressional Research Service (CRS), this legislation will achieve an estimated $100 billion in deficit reduction over five years compared to current law.

As I mentioned above, I believe that the tax code should work for the families that work hard for their income. To that end, the Fair, Flat Tax Act will:

• Replace the five existing education tax incentives with one simple credit of $3,000 for students for four years of college and two years of graduate school.
• Collapse the Earned Income Tax Credit, the Child Credit, and the Dependent Care Credit into one easy-to-use credit for working families with children-while providing more benefits to more families than all of them combined. This credit alone would reduce 200 pages of code to one 12 question form.
• Allow all homeowners to take advantage of the home mortgage deduction, not just those who itemize their returns. It encourages homeownership and eliminates the benefits for the wealthy when they itemize their returns.
• Create a Universal Pension to replace the "alphabet soup" of 16 existing IRA-type accounts with a single portable retirement account for all workers.

I hear from Chicagoans about how frustrating filing taxes can be. I believe that the implementation of these ideas will help reduce some of the confusion and make the process a little easier.

Related Statements

Press Releases

• 6/25/2008 - NEW LEGISLATION TO EXPAND USE OF EARNED INCOME TAX CREDIT INTRODUCED
• 6/17/2008 - Provision to Close KBR Payroll Tax Loophole Signed Into Law
• 4/9/2008 - Good Government Tax Bill to Include Emanuel Provision to Close KBR Payroll Tax Loophole
• 4/9/2008 - Housing Tax Bill to Include Emanuel Property Tax ReliefEmanuel provision to Close the Capital Gains Tax Gap also Included
• 3/13/2008 - Kerry, Obama, Ellsworth, Emanuel Introduce “Fair Share Act of 2008” Reform Closes Offshore Tax Loopholes that Government Contractors Use To Dodge Social Security Taxes
• 3/13/2008 - TODAY: Kerry, Ellsworth, Emanuel Hold Press Conference to Unveil “Fair Share Act of 2008” Reform Closes Offshore Tax Loopholes for Government Contractors That Dodge Social Security Taxes

Speeches and Statements

• 7/24/2008 - RICHEST 1 PERCENT ARE DOING BETTER THAN EVER UNDER BUSH, MIDDLE CLASS IS GETTING SQUEEZED
• 11/9/2007 - Emanuel Statement on AMT: “The Choice is Clear”
• 4/13/2007 - Congressman Rahm Emanuel (IL-5) Delivers Democratic Radio Address
• 5/10/2006 - Emanuel Calls on Congress to Make Working Americans Priority One
• 7/28/2005 - Emanuel Calls for Middle Class Tax Fairness
• 6/8/2005 - Emanuel Calls for Tax Reform that Reflects Middle Class Values

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