H.R. 5105 - The Fair and Simple Tax Act
Working Americans need and deserve a fairer and simpler way to keep more of their hard earned money. That is why I have introduced legislation, H.R. 5105, the Fair and Simple Tax Act, which provides for sweeping reform of our tax code based on the idea that Americans should have more control over their own money. H.R. 5105 will simplify our tax code while also lowering the tax burden on working families and incentivizing individuals and job creators to invest in our economy.
A New, Simple Tax Form
I believe that Americans should not only be paying less in taxes, but they should also be spending less money and time filing them. Already, Americans spend far too much on tax preparation – 6 billion hours at a cost of $265.1 billion per year. This amounts to a 22-cent tax compliance surcharge for every dollar the income tax system collects. The FAST Act would vastly simplify the preparation process by incorporating an optional, single page Fair and Simple Tax Form that cuts the current that tax bracket in half and establishes three new tax brackets – 10 % on the first $40,000 in income, 15% on incomes between $40,000 and $150,000 and 30% on any income above $150,000. The Fair and Simple Tax form also preserves all of the major deductions, including mortgage interest, charitable contributions, state and local taxes, the child tax credit and the personal exemption.
Promote Fairness and Investment with the Tax code
The FAST Act brings needed fairness to our tax code by eliminating the Death Tax and indexing both the individual and corporate Alternative Minimum Taxes to inflation. Indexing the AMT for inflation would remove the immediate threat of the AMT for middle class tax filers and will ensure that that they are not hit with a tax that was never meant for them. Additionally, the FAST Act recognizes the importance of investment in the American economy by providing incentives to both individuals and businesses to invest their money. For example, the FAST Act reduces the individual capital gains tax rate from 15% to 10% and indexes the individual Capital Gains tax for inflation. The FAST Act also provides for a permanent extension of the Research and Development Tax Credit and the 2001 and 2003 tax relief measures.
Keep Job Creation At Home
America’s corporate tax rate is the second highest on the industrialized world. This unnecessarily high tax rate only encourages businesses to send American jobs overseas. The FAST Act would cut the top corporate tax rate from 35 percent to 25 percent to ensure that entrepreneurs can remain competitive and create more jobs at home.
Savings
The FAST Act addresses the importance of providing individuals with more control over their personal saving needs by creating three new, tax-free savings accounts. The new Retirement Savings Account allows individuals to save for future retirement needs by providing a $5,000 tax-free contribution. The new Lifetime Savings Account allows individuals to withdraw funds at any time without penalty and also provides a $5,000 tax-free contribution. The new Lifetime Skills Account allows workers to save for future educational or training needs and provides a $1,000 tax-free contribution.
Access to Healthcare
The FAST Act recognizes that Americans should have more control, not less, over their healthcare expenses. That is why the FAST Act provides a $7,500 tax deduction for individuals and a $15,000 tax deduction for families who do not receive employer-sponsored health coverage. This expanded deduction will provide individuals and families with additional assistance to purchase healthcare and allows unspent funds to be allocated to a Health Savings Account (HSA).
