Every year, Americans spend over 6 billion hours preparing their tax forms. Additionally, the Internal Revenue Service has over 2,000 forms and instructions listed on their website. With Tax Day just a month away, Congressman Michael C. Burgess, M.D. (TX-26) has reintroduced HR 1040, the Flat Tax Act, which would fundamentally reform the broken tax system of the United States. This legislation would provide taxpayers the option of having a flat rate of tax applied to their annual income.
"This system will restore fairness to the tax code by treating everyone equally and incorporating the all-American principle of freedom. Unlike previous versions of the flat tax, this act will allow individuals and business to choose when to opt into the system," said Dr. Burgess. "It will have no loopholes, but will allow some personal exemptions like a standard deduction."
HR 1040 will phase-in the flat tax over a three-year period, with a 19-percent rate for the first two years and a 17-percent rate in subsequent years. The program would be optional. Once electing into the flat tax system, one could not move back and forth between the current and flat tax systems.
"Individuals need a tax system that provides a clear understanding of how their financial decisions will affect them. The Flat Tax Act is pro-growth and will make filing easier on everyone." said Dr. Burgess. "It is based on common-sense economics."
The Flat Tax creates a fair and simple system that will help boost economic activity. When Ronald Reagan cut the tax code in half in 1986, the result of that reform worked. The economy grew, jobs were created, and revenues increased. Now, more than ever, this reform is needed for our country, our economy, and American citizens.