I think this is a great proposal. Would this eliminate the IRS? no more deductions, right? This seems to be the best way to ensure that everyone does pay their fair share. No one should be penalized for being successful. Hard work should yield rewards, not punishment.
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If 10% is good enough for God, it ought to be good enough for government (local/state/fed combined). Flat 10% (or less!) sales tax with no deductions/exclusions so every citizen has skin in the game. Weād have to negotiate what percentage each level of government would receive, but hopefully the feds would get the least!
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I agree with a flat tax rate. However, I do believe there should be a standard deduction for each household, as well as bringing back the personal exemption for each person. This would help poor and lower-middle-class people.
The focus needs to be on households, not āfamilies.ā Too many people are living together now without marriage. They are sharing expenses, so they donāt need two āstandard deductionsā; they just need an extra personal exemption to take care of the extra person, plus a personal exemption for any kids or anyone else living in the household. This would affect people living together as roommates, as well. It would also be fair to people who live alone; currently their standard deduction is half that of a married couple even though the largest expenses are essentially the same for singles vs. married couples. If you donāt believe me, ask the widow living in the house she and her husband shared for many years; ask her if her living expenses were cut in half, or significantly decreased at all, after her husband passed.
A flat tax without any deduction, similar to state sales taxes, is the most fair approach and ensures no one misuses the system. It simplifies the tax codes, reduces the need for IRS audits, and saves everyone money at tax time since we wonāt need TurboTax/H&R Block anymore.
Take the flat tax from the income when we earn it and be done. Donāt tax Social Security benefits or pensions. Donāt tax property. We pay more taxes than any other country and get nothing back for it. It has to stop!
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I donāt think we should be equating government with God. And 10% is too much if everyone pays.
How does this work with low-income families? Iām not sure this is the right approach. My married kids donāt make the same amount we do. How is that fair?
Politicians and political parties like to think they are gods. 
And I agree, 10% is too much, as politicians know no limits and will spend, spend, spend until the end of time!
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Proposal to Simplify IRS Code and Compliance
Title: Proposal to Replace the Current IRS Code with a Flat Percentage of Income Tax System Based on Revenue and Other Income, and to Eliminate All Tax Exemptions and Deductions
Purpose: To simplify the federal income tax system by instituting a percentage tax rate on all forms of revenue, gross income and other income, while eliminating all current tax exemptions and deductions. This reform aims to prevent the tax system from being manipulated for special treatment or behavior modifications. Specific rates are proposed to address different categories of taxpayers, including individuals, businesses (all types i.e. for-profit, non-profit), and foreign-owned or foreign operated companies (regardless of percentage of foreign ownership). The goal is to align government revenue with the success of individuals and businesses/entities.
Resolution
WHEREAS, the current Internal Revenue Code is complex, regulatory cumbersome and creates significant administrative burdens and costly for taxpayers and the Internal Revenue Service (IRS); and
WHEREAS, the myriad of exemptions, deductions, and varying tax rates lead to inequalities, corruption and inefficiencies in tax collection and compliance; and
WHEREAS, the current Internal Revenue Code changes based on political party platforms, lobbyist and other factor which causes uncertainty, instability, and may also cause government resource allocation issues. A tax policy that is stable and changes are infrequent allows for better planning for businesses, individuals and the government. ; and
WHEREAS, a simplified tax system with a tier percentage tax rate on all income types would enhance fairness, transparency, reduce costs to both the taxpayer and tax administration, allow for automation of tax system and efficiency in tax administration; and
WHEREAS, taxpayers can defer taxes (sometimes indefinitely) or potentially reduce their tax liability through various strategies like holding onto assets, reinvesting in like-kind property, or taking advantage of tax-advantaged accounts. A gain is realized at the point when an asset is sold, exchanged, or otherwise disposed of, and the seller receives or is entitled to receive something of value in return (such as money, property, or services). The ārealizationā event is when the gain becomes actualizedāas opposed to being just a paper increase in value (unrealized gain) by eliminating the deferral benefit this enhances fairness.; and
WHEREAS, larger businesses and high income individuals have had the opportunity to impact legislation and regulations, often increasing the national debt and providing market advantages to larger business creating inequity in the tax system; and
WHEREAS, foreign-owned companies benefit from the use of U.S. infrastructure often have large lobbying consultants that are able to impact legislation and regulations, often increasing the national debt and providing access to the U.S. markets and advantages derived from lobbying efforts ;
NOW, THEREFORE, BE IT RESOLVED THAT:
- Abolition of Current Tax Code:
- The current Internal Revenue Code, Title 26 Subtitle A, shall be repealed in its entirety and replaced with this resolution.
Income Defined as: All forms of revenue, gross income, and other income regardless of cash, digital, assets or other forms of payment. This section provides a broad definition of income, stating that gross income includes āall income from whatever source derivedā unless otherwise specifically excluded:
1. Compensation for Services
Includes to all forms of payment made to an individual or entity in exchange for providing services. This compensation is considered taxable income and must be reported to the IRS. It includes various types of income, both cash and non-cash, derived from employment or self-employment. This includes:
Salaries and Wages : Payments for services, including bonuses, awards, and severance pay.
Commissions : Earnings based on sales or services, including fees.
Self-Employment Income : Income from operating a business as a sole proprietor, freelancer, or independent contractor.
Fringe Benefits : Non-cash compensation such as the personal use of a company vehicle, which may be taxable depending on the benefit type.
Tips : Payments received for services in industries like hospitality.
Other Compensation for Services : Includes fees, commissions, and similar items.
2. Business and Farm Income
This category encompasses gross receipts and sales from business or farm operations, rents, royalties, and income derived from business activities. It includes:
Gross Receipts or Sales : Income from selling goods or services.
Rents and Royalties : Payments from leasing property or earning royalties from intellectual property (e.g., patents, trademarks, or creative works).
Farm Income : Revenue from agricultural activities such as crop and livestock sales, and government subsidies.
Income from Sale of Non-Current Assets : Revenue from selling long-term business assets. (Taxed when realized at Gain Rate)
3. Investment and Passive Income
This includes income from various financial investments:
Interest Income : Earnings from savings accounts, bonds, certificates of deposit (CDs), and other interest-bearing products.
Dividends : Distributions of earnings from stocks or mutual funds.
Rental Income : Earnings from leasing property.
Capital Gains : Profits from selling securities, including stocks, bonds, mutual funds, and property. Includes both short-term (held less than a year) and long-term (held over a year) capital gains. (Tax when realized at Gain Rate)
Partnership and S Corporation Income : Distributive shares from partnerships and S corporations, reported by the taxpayer.
Revaluation Gains on Fixed Assets : Gains from reassessing the value of fixed assets. (Tax when realized at Gain Rate)
4. Retirement and Pension Income
Income derived from retirement accounts and pension plans:
IRA Distributions : Withdrawals from traditional or Roth IRAs (Tax-Free until the amount contributed has been returned to the account holder).
Pension and Annuity Payments : Payments from employer-sponsored pension plans, annuities, and retirement accounts (401(k), 403(b), SEP).
Social Security Benefits : refer to payments made to individuals under the Social Security program, including retirement, survivor, and disability benefits. Social Security benefits also include monthly retirement benefits, disability insurance payments, and benefits paid to the spouses or dependents of a beneficiary. Social Security becomes taxable once the employer and employee amount that were withheld and remitted to IRS as reported by Social Security Administration have been paid back to the recipient. (i.e. The employer & employer amount that was withheld is $100,000. Taxes would not be paid until the return of the initial $100,000 is paid back to recipient.)
5. Miscellaneous Income
This encompasses various other sources of taxable income:
Alimony : (also known as spousal support) refers to payments made to a spouse or former spouse under a divorce or separation agreement.
Unemployment Compensation : Benefits from unemployment insurance programs.
Gambling Winnings : Income from lotteries, raffles, casinos, and sports betting, with non-cash winnings valued at fair market value.
Prizes and Awards : Includes cash prizes from contests, sweepstakes, and lotteries.
Jury Duty Pay : Compensation for serving on a jury.
Cancellation of Debt (COD) Income : When a debt is forgiven or canceled, the amount is generally taxable.
Bartering Income : Fair market value of goods or services exchanged.
Hobby Income : Earnings from activities not conducted as a business.
Income from Injuries or Sickness Compensation : Such as payments received in compensation for personal injuries.
Judicial Awards/Settlements : Court-awarded compensations, including legal settlements.
5. Income from Estates and Trusts
Income passed through from estates or trusts, which can include interest, dividends, or other earnings:
Beneficiary Income : Distributions to beneficiaries from estates or trusts.
6. Other Forms of Income
These cover uncommon income types, such as:
Scholarships and Fellowships : Taxable if used for non-tuition-related expenses like room and board.
Life Insurance Proceeds : Generally tax-free if received as a death benefit; taxable if received in installments or sold for cash.
Gifts and Inheritances : Not typically taxable for the recipient but may be subject to estate or gift taxes.
Foster Care Payments : Income may be tax-exempt depending on the circumstances.
Income from Illegal Activities : Earnings from illegal actions are taxable under IRS law.
7. Gains from Business and Personal Sales
This includes profits from the sale of personal, real, or business property the following are taxed when gain is realized at GAIN RATE:
Real Estate Sales : Profits from selling residential, investment, or commercial properties.
Personal Property Sales : Gains from selling personal assets, including vehicles, artwork, and collectibles.
Business Property Sales : Gains from selling business-related assets, including equipment and real estate.
Sale of a Business : Profits from selling a business in whole or in part.
8. Regulatory Compliance Credits
These credits are generated through the sale of various environmental and compliance-related assets the revenue derived from sales shall be tax at CREDITS RATE:
Emission Reduction Credits (ERCs) : Offset greenhouse gas emissions.
Renewable Energy Credits (RECs) : Proof of electricity generated from renewable sources.
Water Quality Credits : Offset impacts on water quality during development.
Habitat Conservation Credits : Support wildlife and habitat preservation.
Wetland Mitigation Credits : Compensate for loss of wetlands.
Sustainable Agriculture Credits : Promote sustainable farming practices.
Carbon Offsets : Reduce carbon emissions.
Conservation Easement Credits : Protect land from development.
Energy Efficiency Credits : For implementing energy-efficient practices.
Zero-Emission Vehicle Credits : For producing and using zero-emission vehicles, such as electric cars.
Returns and Allowances : refer to reductions in gross sales due to customer returns, refunds, or other allowances granted by the seller. These adjustments are used to calculate net sales by deducting these amounts from the gross sales. (Returns and Allowances as defined below may be deducted from income.)
Returns : These are goods that have been sold but are later returned by the customer for a refund or exchange. The seller usually reduces the total sales revenue to account for these returns.
Allowances : Allowances refer to price reductions or discounts given to the customer after the sale, usually due to issues like damaged or defective goods, late shipments, or other service-related problems. These are recorded as reductions in sales revenue.
- Implementation of Percent Income Tax Rates:
- All Taxpayers: Shall pay 15% on all realized gains (GAIN RATE) and income derived from regulatory credit (CREDIT RATE) and pay on all other revenue, gross income or other income as follows:
- Individuals: A percentage income tax rate of 3% shall be imposed on all individuals.
- Businesses (For Profit/Not for Profit, Regardless of Form) up to $25M Revenue: A percentage income tax rate of 3% shall be imposed.
- Businesses (For Profit/Not for Profit, Regardless of Form) or high-income individuals over $25M Revenue and ALL Companies trading on the stock exchange market: A percentage income tax rate of 6% shall be imposed, broken down as follows:
- 3% base rate.
- 2% for national debt reduction imposed until debt is paid off.
- 1% for incentive programs, grants or other special tax breaks.
- Foreign-Owned or Operated Companies: A percentage income tax rate of 9% shall be imposed, broken down as follows:
- 3% base rate.
- 2% for national debt reduction imposed until debt is paid off.
- 1% for incentive programs, grants or other special tax breaks.
- 3% for infrastructure use.
- Collection Process:
- Income tax will be based on total revenue, not as a national sales tax. It will not be collected as withholding. Additional collections of income tax will be calculated into the income tax calculation.
- Elimination of Exemptions and Deductions:
- All current tax exemptions, deductions, credits, and exclusions shall be eliminated.
- The tax calculation will be straightforward: total income multiplied by the applicable percentage tax rate.
- Transition Provisions:
- A transitional period of [specified duration] shall be established to ensure a smooth changeover from the current tax system to the new percentage tax system.
- During the transition period, the IRS shall issue guidelines and provide assistance to taxpayers to adapt to the new system.
- Administrative Simplification:
- The IRS shall simplify tax forms and instructions to reflect the new percentage tax system.
- Measures shall be taken to reduce administrative costs and improve the efficiency of tax collection under the new system.
- Reporting Requirements:
- All individuals shall be required to report their total income annually, with no need to account for exemptions or deductions.
- All entities shall be required to report their total income monthly, with no need to account for exemptions or deductions.
- Income reporting shall be done using simplified forms provided by the IRS.
- IRS shall not compel direct or indirect collections from 3rd party all reporting and submission shall be done by the taxpayer unless otherwise authorized by the taxpayer.
- Use of Additional Revenues:
- Funds collected for national debt reduction and incentive programs shall be managed and allocated transparently, with regular reporting to Congress and the public with clear identified recipients and purpose of use of funds.
- Infrastructure use fees collected from foreign-owned companies shall be invested in maintaining and improving U.S. infrastructure (i.e. roads, bridges, dams, airports, ports any other defined infrastructure shall be defined by Congress).
BE IT FURTHER RESOLVED THAT:
- The effectiveness of the percentage tax system shall be reviewed periodically to ensure it meets the goals of fairness, simplicity, and efficiency.
- Adjustments to the percentage tax rates may be made by super majority vote of Congress only after a putting in place a balanced budget and doing reductions for discretionary spending has been completed and a review completed to identifying adequate revenue needed to adequately fund necessary federal operations and services
Explanation:
This resolution proposes a fundamental change to the U.S. tax system, moving from a complex, multi-rate system with numerous exemptions and deductions to a straightforward tiered percentage tax rate. Different rates are proposed for individuals based on income, businesses based on income, and foreign-owned companies to ensure fairness and adequate funding for national debt reduction and infrastructure use. The goal is to simplify tax compliance, reduce administrative burdens, and create a fairer tax system where all income is taxed uniformly according to predefined rates. To remove special lobbying efforts to gain favorable taxation terms to benefit industry or specific businesses. To reduce the cost of tax compliance for taxpayers and administrators and to allow for a smoother transition to a taxpayer automated system.
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In my opinion, thatās what is great about the flat taxālow income, low tax, yet still a participant in the great American experiment, and not a freeloader. How is that not fair?
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I agree with you. I read another one where they were proposing 13% income tax which I thought sounded high. Years ago I swore I read that an economist ran numbers and 5% would deliver roughly 3 times the tax revenue as the system that was currently in place would have provided, but that was years ago, and I would love to see some non-biased economist actually sit down and crunch some numbers
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Well hereās something to think about, taxes are not just stressful because of the actual dollar amount, but the fact that many of us do not plan well with our finances and live in dread of April 15th. If you make it a sales tax, then you are essentially paying your taxes as you go, so the stress of it goes away.
Also remember that no sales taxes would be applied to food, and for things like rent or a mortgage there are obviously no sales taxes, and utilities do not have a sales tax. So you can essentially pay no taxes for your lifestyle, but only on consumption
Living in California, the sales tax has always been around 10%, and while annoying, I never really think about it or get stressed out, rich and poor people alike pay the same tax
As I posted here:
ā¦I think the issue would be a transition strategy to a new system. I proposed two ideas that I think would effectively do so.
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Yes, all wealth is taxed. A FairTax.org is better than a flat tax which can be gamed
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This Flat Tax proposal would not only benefit the American people but cut spending for the government by eliminating the IRS. This would be the perfect platform for JD to run on in the next election.
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Why do you say that?? A flat tax on a smaller amount is just less money and a lot more money than the are bringing home now.
Yes, on a flat tax, everyone is taxed at the same rate on purchases and services.
For example, using a simple 10% example, if you buy an item for $50, you are taxed $5, someone that buys a $1mil yacht is taxed $100k. So the tax is spread out evenly and people are paying ātheir fair shareā as people like to cry needs to happen.
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This should apply to all money earned.
I like Japanās simple tax bracket system. I think thatās fair.
I think a flat tax would be the best thing for our country. Eliminate all the othersā¦no deductions, no loopholes. Combining this with a significant reduction in the size/waste of our federal government and I think we would have a surplus and finally be able to pay down our national debt.
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Absolutely! Flat tax is the only fair tax. Everybody pays. If you make a dollar, you pay $.10 in taxes. If you make a hundred dollars, you pay $10. in taxes and so on. No deductions. No loopholes. if you made it, you pay.
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