Subject: Tax Reform Comment: I favor a flat tax system mainly because many low income people who don't pay taxes now would be affected by a national sales tax. My system would be phased in and would eliminate: 1.itemized deductions 2. tax on interest & dividends 3. all tax credits including EIC 4. all adjustments to income including IRA 5. AMT 6. tax on social security Items to be taxed: 1. w2 income 2. business net income (SE health on sched c) 3. capital gains 4. pensions after recovery of contrib. Income deductions to be allowed: 1. standard deduction 2. Exemption deduction with no phase- out Benefits: 1. Should not seriously affect account- ing businesses 2. downsized IRS 3. banks save on 1099 requirements for interest & dividends 4. help seniors Problems: 1. will affect people getting EIC but this should be a welfare issue & it isn't working as intended. Tax rate: 1. could be set using historical data so as to maintain current revenues 2. adjustments to tax rates, standard deductions & exemptions would be subject to annual revue as is done today. |