Sen. Richard Shelby, R-Ala., introduced a bill this week to replace the tax code with a 17 percent flat tax that would reduce tax returns to “the size of a postcard,” CNSNews reported.
The bill is called the Simplified, Manageable And Responsible Tax (SMART) Act, and it establishes a flat tax rate on all income and repeals estate taxes, gift taxes and the Alternative Minimum Tax.
“With the SMART Act in place, taxpayers would file a return the size of a postcard,” Shelby’s office said.
CNSNews added that the only exemptions would be on personal taxes:
- $14,070 for a single person;
- $17,970 for a head of household;
- $28,140 for a married couple filing jointly; and
- $6,070 for each dependent
A flat tax is “an idea that Shelby said would drastically simplify the tax code, reduce Americans’ tax burden, eliminate corporate welfare, and boost American competitiveness,” AL.com noted.
“We spend too much. We borrow too much. We tax too much. We need straightforward solutions to these clear problems,” Shelby said.
A flat tax is not to be confused with the “FairTax,” a national sales tax that includes a prebate. The FairTax rate after necessities is 23 percent and equal to the lowest current income tax bracket combined with employee payroll taxes, both of which will be eliminated.
With so much talk in Washington about reforming the tax code, it’s nice to see a lawmaker put action to words. While there has been a lot of discussion about whether a flat tax would actually work, it is widely believed to be a substantial improvement over the current internal revenue code.
And it removes politicians from the business of offering favors, which may be its undoing.