[Congressional Record Volume 149, Number 60 (Saturday, April 12, 2003)]
[Extensions of Remarks]
[Page E781]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE FREEDOM FLAT TAX ACT

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                        HON. MICHAEL C. BURGESS

                                of texas

                    in the house of representatives

                         Friday, April 11, 2003

  Mr. BURGESS. Mr. Speaker, I rise today to introduce the Freedom Flat 
Tax Act.
  Albert Einstein once said, ``The hardest thing in the world to 
understand is the income tax.'' If you look at the current Tax Code, it 
is easy to see his genius.
  The cost of the current income tax system in both time and dollars is 
just too high. Each year, Americans spend 6.1 billion hours preparing 
their tax forms and businesses spend 800 million hours complying with 
the Tax Code. In 2001 alone, Americans lost at least $183 billion in 
opportunity costs--calculated at $30/hour--that people spent working on 
their taxes instead of working on money-producing activities for 
themselves.
  Two-thirds of Americans think the income tax system is too complex. 
We need a simpler system for all Americans to understand. Taxpayer 
phone calls to the IRS help line doubled during the 1990s from 56 
million to 111 million, even though the number of taxpayers only grew 
by 12 percent. The Federal tax rules are over 45,500 pages in length, 
which is double the number of pages since the 1970s, including the full 
Tax Code, IRS rules and regulations, and tax court rulings. As of May 
2000, the Tax Code contained 1,395,028 words--nearly 319 times the 
number of words in the U.S. Constitution. The average taxpayer pays 
$1,839 per household in compliance costs. In other words, that taxpayer 
must work 6 days per year just to pay for the cost of preparing his or 
her taxes for that year. These complexities are completely unnecessary.
  I believe Americans need to keep more of their money they work for 
each day. Valuable resources are being lost to taxes; resources that 
could be used for productive, job-creating economic behavior or for 
spending time with our families. As you can see, the costs imposed by 
our tax system are just too high.
  It is for this reason that I am introducing the Freedom Flat Tax Act. 
This legislation will allow Americans to opt out of the current 
convoluted and complex tax system and into a pro-growth tax system that 
will restore fairness, simplicity, and efficiency to our Tax Code. 
Congress has the obligation to remove those obstacles to American 
economic growth and health.
  The Freedom Flat Tax will phase-in the flat tax over a 3-year period, 
with a 19-percent rate for the first 2 years and a 17-percent rate in 
subsequent years. It will have no deductions or loopholes, but will 
allow some personal exemptions, including a $5,510 exemption for each 
dependent.
  We've heard of the flat tax before. Here's how my proposal differs 
from other versions of the flat tax bill: First of all, it is optional. 
This bill will allow individuals and businesses to choose if and when 
they will opt into the system. Second, it is permanent. The decision to 
opt into the flat tax system will be permanent to prevent possible tax 
evasion resulting from taxpayers jumping back and forth from the 
current income-based system to the flat tax system.

  The Freedom Flat Tax will create a system that promotes fairness and 
economic prosperity by treating everyone the same, regardless of income 
or occupation, and removing the special preferences and disincentives 
for economic growth that characterize our current tax system.
  The goal of the Freedom Flat Tax is to create a tax system that 
minimizes the number of market-distorting investment decisions that are 
made as a result of the current tax system; people will base their 
financial decisions on common-sense economics, not the tax code. When 
savings are no longer taxed twice, people will save and invest more, 
leading to higher productivity and greater take-home pay. The flat tax 
will spur economic growth by eliminating the current tax code's bias 
against savings and investment. Because the flat tax treats all 
economic activity equally, it will promote greater economic efficiency 
and increased prosperity.
  It is estimated that the flat tax system will save taxpayers more 
than $100 billion per year. This increase in take home pay will give 
people more money to spend in the economy, which will help boost 
economic activity. In these difficult times, Congress will soon be 
debating the need for an economic stimulus. Mr. Speaker, I ask everyone 
to stop and imagine what a stimulus that $100 billion would provide to 
our economy if we put it in the hands of average Americans! I yield the 
floor.

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