Filing your taxes getting you down?
A simplified tax code may soon be a reality if flat tax legislation sponsored by Alabama’s senior senator can pass in Washington.
As a few hundred thousand Americans file their last-minute tax returns on Tuesday, Alabama U.S. Senator Richard Shelby has introduced S.893, which would repeal the current tax code and replace it with a17 percent flat tax on all income, both personal and business.
Known as the Simplified, Manageable, and Responsible Tax (SMART) Act, the bill also repeals estate taxes, gift taxes, and the Alternative Minimum Tax (ATM).
The only exemptions would be personal exemptions of:
- $14,590 for a single person
- $18,630 for a head of household
- $29,190 for a married couple filing jointly
- $6,290 for each dependent
These allowances would also be indexed to the consumer price index in order to prevent inflation from raising the tax burden. Additionally, as a way to prevent the double-taxation of income, earnings from savings would not be included as taxable income – resulting in an immediate tax cut for virtually all taxpayers.
“On Tax Day, the American people are reminded that our nation’s tax code is unnecessarily complex, confusing, and inefficient,” said Shelby. “The SMART Act is a straightforward solution that would require taxpayers to only file a simple postcard size return, which would save Americans time and money. The SMART Act would also allow businesses to redirect resources away from tax compliance and instead focus on expanding their businesses and creating jobs.”
By closing loopholes for individuals and businesses, the SMART Act endeavors to 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.