[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2122 Introduced in Senate (IS)]








109th CONGRESS
  1st Session
                                S. 2122

To terminate the Internal Revenue Code of 1986, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 16, 2005

  Mr. Isakson introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
To terminate the Internal Revenue Code of 1986, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Date Certain Tax Code Replacement 
Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to set a date certain for replacing the 
Internal Revenue Code of 1986 with a simple and fair alternative.

SEC. 3. TERMINATION OF INTERNAL REVENUE CODE OF 1986.

    (a) In General.--No tax shall be imposed by the Internal Revenue 
Code of 1986--
            (1) for any taxable year beginning after December 31, 2008; 
        and
            (2) in the case of any tax not imposed on the basis of a 
        taxable year, on any taxable event or for any period after 
        December 31, 2008.
    (b) Exception.--Subsection (a) shall not apply to taxes imposed 
by--
            (1) chapter 2 of such Code (relating to tax on self-
        employment income);
            (2) chapter 21 of such Code (relating to Federal Insurance 
        Contributions Act); and
            (3) chapter 22 of such Code (relating to Railroad 
        Retirement Tax Act).

SEC. 4. NATIONAL COMMISSION ON TAX REFORM AND SIMPLIFICATION.

    (a) Findings.--The Congress finds the following:
            (1) The Internal Revenue Code of 1986 is overly complex, 
        imposes significant burdens on individuals and businesses and 
        the economy, is extremely difficult for the Internal Revenue 
        Service to administer, and is in need of fundamental reform and 
        simplification.
            (2) Many of the problems encountered by taxpayers in 
        dealing with the Internal Revenue Service could be eliminated 
        or alleviated by fundamental reform and simplification.
            (3) Recent efforts to simplify or reform the tax laws have 
        not been successful due in part to the difficulty of developing 
        broad-based, nonpartisan support for proposals to make such 
        changes.
            (4) Many of the problems with the Internal Revenue Service 
        stem from the overly complex tax code the agency is asked to 
        administer.
    (b) Establishment.--
            (1) In general.--To carry out the purposes of this section, 
        there is established within the legislative branch a National 
        Commission on Tax Reform and Simplification (in this section 
        referred to as the ``Commission'').
            (2) Composition.--The Commission shall be composed of 15 
        members (of which not less than 2 members are from small 
        businesses with less than 50 employees), as follows:
                    (A) Three members appointed by the President, two 
                from the executive branch of the Government and one 
                from the private sector.
                    (B) Four members appointed by the majority leader 
                of the Senate, one from Members of the Senate and three 
                from the private sector.
                    (C) Two members appointed by the minority leader of 
                the Senate, one from Members of the Senate and one from 
                the private sector.
                    (D) Four members appointed by the Speaker of the 
                House of Representatives, one from Members of the House 
                and three from the private sector.
                    (E) Two members appointed by the minority leader of 
                the House of Representatives, one from Members of the 
                House and one from the private sector.
            (3) Chair.--The Commission shall elect a Chair (or two Co-
        Chairs) from among its members.
            (4) Meetings, quorums, vacancies.--After its initial 
        meeting, the Commission shall meet upon the call of the Chair 
        (Co-Chairs, if elected) or a majority of its members. Nine 
        members of the Commission shall constitute a quorum. Any 
        vacancy in the Commission shall not affect its powers, but 
        shall be filled in the same manner in which the original 
        appointment was made. Any meeting of the Commission or any 
        subcommittee thereof may be held in executive session to the 
        extent that the Chair (Co-Chairs, if elected) or a majority of 
        the members of the Commission or subcommittee determine 
        appropriate.
            (5) Continuation of membership.--If--
                    (A) any individual who appointed a member to the 
                Commission by virtue of holding a position described in 
                paragraph (2) ceases to hold such position before the 
                report of the Commission is submitted under subsection 
                (g); or
                    (B) a member was appointed to the Commission as a 
                Member of Congress and the member ceases to be a Member 
                of Congress, or was appointed to the Commission because 
                the member was not an officer or employee of any 
                government and later becomes an officer or employee of 
                a government,
        that member may continue as a member for not longer than the 
        30-day period beginning on the date that such individual ceases 
        to hold such position or such member ceases to be a Member of 
        Congress or becomes such an officer or employee, as the case 
        may be.
            (6) Appointment; initial meeting.--
                    (A) Appointment.--It is the sense of the Congress 
                that members of the Commission should be appointed not 
                more than 60 days after the date of the enactment of 
                this Act.
                    (B) Initial meeting.--If, after 60 days from the 
                date of the enactment of this Act, eight or more 
                members of the Commission have been appointed, members 
                who have been appointed may meet and select the Chair 
                (or Co-Chairs) who thereafter shall have the authority 
                to begin the operations of the Commission, including 
                the hiring of staff.
    (c) Functions of the Commission.--
            (1) In general.--The functions of the Commission shall be--
                    (A) to conduct, for a period not to exceed 18 
                months from the date of its first meeting, the review 
                described in paragraph (2); and
                    (B) to submit to the Congress a report of the 
                results of such review, including recommendations for 
                fundamental reform and simplification of the Internal 
                Revenue Code of 1986, as described in subsection (g).
            (2) Review.--The Commission shall review--
                    (A) the present structure and provisions of the 
                Internal Revenue Code of 1986, especially with respect 
                to--
                            (i) its impact on the economy (including 
                        the impact on savings, capital formation and 
                        capital investment);
                            (ii) its impact on families and the 
                        workforce (including issues relating to 
                        distribution of tax burden);
                            (iii) the compliance cost to taxpayers, 
                        including small businesses and corporations; 
                        and
                            (iv) the ability of the Internal Revenue 
                        Service to administer such provisions;
                    (B) whether tax systems imposed under the laws of 
                other countries could provide more efficient and fair 
                methods of funding the revenue requirements of the 
                government;
                    (C) whether the present income tax system should be 
                replaced with a flat tax, a national sales tax, or any 
                other specified tax system;
                    (D) whether the Internal Revenue Code of 1986 can 
                be simplified, absent wholesale restructuring or 
                replacement thereof; and
                    (E) the transition costs (including the length of 
                time recommended for a smooth transition) associated 
                with any changes to the present Federal tax system 
                (both real and implied) which would be imposed on 
                citizens, businesses, and the Government.
    (d) Powers of the Commission.--
            (1) In general.--The Commission or, on the authorization of 
        the Commission, any subcommittee or member thereof, may, for 
        the purpose of carrying out the provisions of this section, 
        hold such hearings and sit and act at such times and places, 
        take such testimony, receive such evidence, and administer such 
        oaths, as the Commission or such designated subcommittee or 
        designated member may deem advisable.
            (2) Contracting.--The Commission may, to such extent and in 
        such amounts as are provided in appropriation Acts, enter into 
        contracts to enable the Commission to discharge its duties 
        under this section.
            (3) Assistance from federal agencies and offices.--
                    (A) Information.--The Commission is authorized to 
                secure directly from any executive department, bureau, 
                agency, board, commission, office, independent 
                establishment, or instrumentality of the Government, as 
                well as from any committee or other office of the 
                legislative branch, such information, suggestions, 
                estimates, and statistics as it requires for the 
                purposes of its review and report. Each such 
                department, bureau, agency, board, commission, office, 
                establishment, instrumentality, or committee shall, to 
                the extent not prohibited by law, furnish such 
                information, suggestions, estimates, and statistics 
                directly to the Commission, upon request made by the 
                Chair (Co-Chairs, if elected).
                    (B) Treasury department.--The Secretary of the 
                Treasury is authorized on a nonreimbursable basis to 
                provide the Commission with administrative services, 
                funds, facilities, staff, and other support services 
                for the performance of the Commission's functions.
                    (C) General services administration.--The 
                Administrator of General Services shall provide to the 
                Commission on a nonreimbursable basis such 
                administrative support services as the Commission may 
                request.
                    (D) Joint committee on taxation.--The staff of the 
                Joint Committee on Taxation is authorized on a 
                nonreimbursable basis to provide the Commission with 
                such legal, economic, or policy analysis, including 
                revenue estimates, as the Commission may request.
                    (E) Other assistance.--In addition to the 
                assistance set forth in subparagraphs (A), (B), (C), 
                and (D), departments and agencies of the United States 
                are authorized to provide to the Commission such 
                services, funds, facilities, staff, and other support 
                services as they may deem advisable and as may be 
                authorized by law.
            (4) Postal services.--The Commission may use the United 
        States mails in the same manner and under the same conditions 
        as departments and agencies of the United States.
            (5) Gifts.--The Commission may accept, use, and dispose of 
        gifts or donations of services or property in carrying out its 
        duties under this section.
    (e) Staff of the Commission.--
            (1) In general.--The Chair (Co-Chairs, if elected), in 
        accordance with rules agreed upon by the Commission, may 
        appoint and fix the compensation of a staff director and such 
        other personnel as may be necessary to enable the Commission to 
        carry out its functions without regard to the provisions of 
        title 5, United States Code, governing appointments in the 
        competitive service, and without regard to the provisions of 
        chapter 51 and subchapter III or chapter 53 of such title 
        relating to classification and General Schedule pay rates, 
        except that no rate of pay fixed under this subsection may 
        exceed the equivalent of that payable to a person occupying a 
        position at level V of the Executive Schedule under section 
        5316 of title 5, United States Code. Any Federal Government 
        employee may be detailed to the Commission without 
        reimbursement from the Commission, and such detailee shall 
        retain the rights, status, and privileges of his or her regular 
        employment without interruption.
            (2) Consultant services.--The Commission is authorized to 
        procure the services of experts and consultants in accordance 
        with section 3109 of title 5, United States Code, but at rates 
        not to exceed the daily rate paid a person occupying a position 
        at level IV of the Executive Schedule under section 5315 of 
        title 5, United States Code.
    (f) Compensation and Travel Expenses.--
            (1) Compensation.--
                    (A) In general.--Except as provided in subparagraph 
                (B), each member of the Commission may be compensated 
                at not to exceed the daily equivalent of the annual 
                rate of basic pay in effect for a position at level IV 
                of the Executive Schedule under section 5315 of title 
                5, United States Code, for each day during which that 
                member is engaged in the actual performance of the 
                duties of the Commission.
                    (B) Exception.--Members of the Commission who are 
                officers or employees of the United States or Members 
                of Congress shall receive no additional pay on account 
                of their service on the Commission.
            (2) Travel expenses.--While away from their homes or 
        regular places of business in the performance of services for 
        the Commission, members of the Commission shall be allowed 
        travel expenses, including per diem in lieu of subsistence, in 
        the same manner as persons employed intermittently in the 
        Government service are allowed expenses under section 5703(b) 
        of title 5, United States Code.
    (g) Report of the Commission; Termination.--
            (1) Report.--Not later than 18 months after the date of the 
        first meeting of the Commission, the Commission shall submit a 
        report to the Committee on Ways and Means of the House of 
        Representatives and the Committee on Finance of the Senate. The 
        report of the Commission shall describe the results of its 
        review (as described in subsection (c)(2)), shall make such 
        recommendations for fundamental reform and simplification of 
        the Internal Revenue Code of 1986 as the Commission considers 
        appropriate, and shall describe the expected impact of such 
        recommendations on the economy. The measurement of such impact 
        shall be made using both static and dynamic scoring models.
            (2) Termination.--
                    (A) In general.--The Commission, and all the 
                authorities of this section, shall terminate on the 
                date which is 90 days after the date on which the 
                report is required to be submitted under paragraph (1).
                    (B) Concluding activities.--The Commission may use 
                the 90-day period referred to in subparagraph (A) for 
                the purposes of concluding its activities, including 
                providing testimony to committees of Congress 
                concerning its report and disseminating that report.
    (h) Authorization of Appropriations.--There is authorized to be 
appropriated such sums as may be necessary for the activities of the 
Commission. Until such time as funds are specifically appropriated for 
such activities, $2,000,000 shall be available from fiscal year 2006 
funds appropriated to the Treasury Department, ``Departmental Offices'' 
account, for the activities of the Commission, to remain available 
until expended.

SEC. 5. TIMING OF IMPLEMENTATION.

    In order to ensure an easy transition and effective implementation, 
the Congress hereby declares that any new Federal tax system shall be 
approved by Congress in its final form no later than July 4, 2008. If a 
new Federal tax system is not so approved by July 4, 2008, then 
Congress shall be required to vote to reauthorize the Internal Revenue 
Code of 1986.
                                 <all>