The Freedom from Income Tax Act
Purpose:
To eliminate the federal income tax on individual and corporate income, providing tax relief, simplifying the tax code, and encouraging economic growth by shifting to an alternative federal revenue structure.
Section 1: Findings and Purpose
- Findings
a. Federal income tax places a financial burden on individuals and businesses, inhibiting economic growth and reducing disposable income.
b. The complexity of the current tax code results in administrative inefficiencies and compliance burdens.
c. Many other nations have successfully implemented alternative tax structures, leading to simplified tax administration and economic benefits.
- Purpose
The purpose of this Act is to repeal federal income taxation on both individuals and corporations and to explore and implement alternative methods for generating federal revenue that incentivize economic growth and reduce administrative burdens.
Section 2: Repeal of Federal Income Tax
- Individual Income Tax
a. Title 26, Subtitle A of the Internal Revenue Code, which imposes a federal income tax on individual earnings, is hereby repealed.
b. All existing individual income tax obligations for the taxable years prior to the date of enactment shall be preserved, but no further obligations will be imposed beyond this date.
- Corporate Income Tax
a. Title 26, Subtitle A, Chapter 1, Part II of the Internal Revenue Code, which imposes a federal income tax on corporations, is hereby repealed.
b. All existing corporate income tax obligations for taxable years prior to the enactment shall be preserved, but no further obligations will be imposed beyond this date.
Section 3: Establishment of Alternative Revenue Sources
- National Consumption Tax
a. A flat-rate national consumption tax on goods and services shall be imposed as a replacement for the income tax, at a rate to be determined by Congress.
b. Essential goods such as groceries, healthcare, and educational materials may be exempted from this consumption tax to reduce the burden on low-income individuals and families.
- Other Revenue Mechanisms
a. Revenue sources including but not limited to tariffs, fees, and excise taxes on luxury goods will be evaluated for potential increases to support federal revenue.
b. A commission shall be established to monitor, adjust, and improve the alternative revenue system as needed to ensure financial stability and economic growth.
Section 4: Implementation
- Timeline
a. This Act shall take effect on January 1st, [Year of Implementation + 1], allowing sufficient time for the transition from the income tax system to the new revenue structure.
b. The Department of the Treasury will issue guidance on the transition to all affected taxpayers and businesses within six months of enactment.
- Transition Plan
a. The Internal Revenue Service (IRS) shall begin reducing operations associated with individual and corporate income tax enforcement and reallocating resources to the administration of alternative revenue sources.
b. The Treasury Department will create a public education campaign to inform taxpayers of the changes, ensuring smooth adaptation to the new system.
Section 5: Enforcement and Oversight
- Establishment of a Tax Reform Oversight Commission
a. This commission, comprising members from the Treasury Department, economic policy experts, and representatives from both chambers of Congress, will be established to oversee the implementation and ongoing management of alternative revenue sources.
b. The commission will be responsible for ensuring that revenue collection meets federal budgetary needs and for recommending adjustments to tax rates or structures if shortfalls occur.
Section 6: Severability Clause
If any provision of this Act or the application thereof to any person or circumstance is held invalid, the remainder of the Act and the application of such provisions to other persons or circumstances shall not be affected.
Conclusion:
This bill seeks to end federal income taxation in favor of a simplified, growth-friendly tax system that reduces the financial and administrative burdens on individuals and businesses, promoting a more efficient, equitable, and transparent system of government revenue.
This draft proposal offers a basic framework; adjustments may be needed to address budget balancing, compliance enforcement, and transition logistics.
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