[Congressional Record Volume 153, Number 173 (Thursday, November 8, 2007)]
[House]
[Page H13391]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         THE SIMPLIFIED USA TAX

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Pennsylvania (Mr. English) is recognized for 5 minutes.
  Mr. ENGLISH of Pennsylvania. Mr. Speaker, I rise tonight to talk 
about an issue that has been close to my heart since I came to 
Congress. Clearly, the current tax code is far too complicated. It is 
riddled with obvious inequities. Its structure punishes savings and 
investment, which reduces economic and job growth and burdens domestic 
industries struggling to remain competitive in today's global market.
  Although the U.S. Treasury Department has called for international 
tax reform and has advocated policies to advance U.S. competitiveness, 
increase national savings, and reduce our trade barriers, this Congress 
has failed to offer a substantive response.
  Recently, we in the Ways and Means Committee have received a proposal 
that presents itself as tax reform but is, in fact, as you are going to 
hear later tonight, a Rube Goldberg device to raise taxes. In this 
context, it is important to consider other alternatives, and tonight I 
would like to discuss my own tax proposal which encompasses all of 
these concerns and would attract a broad cross-section of working 
Americans.
  My proposal, the Simplified USA Tax, puts the right incentives in 
place to grow our economy and to create new jobs. The Simplified USA 
Tax has three key components:
  One, it simplifies the tax code by a factor of about 75 percent; two, 
it takes the taxes off of savings to promote thrift and address a 
national dearth of savings; and, three, it makes America significantly 
more competitive, thereby creating and preserving better jobs within 
our borders.

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  The simplified U.S.A. tax starts out with just three simple low 
rates, 15 percent at the bottom, 25 percent in the middle, and 30 
percent at the top.
  Through a payroll tax credit to all wage earners, SUSAT effectively 
lowers the income tax rates to the 7 and 17 percent range for nearly 
all Americans.
  Under my proposal, and this is one significant departure from some 
tax reform blueprints, everyone would get a deduction for mortgage 
interest on their home. In addition, the SUSAT proposal allows 
charitable donations and tuition deductions.
  To further ensure that the new Tax Code would be progressive, my 
proposal also permits all families to take a generous family credit, 
and qualifying families to take an additional refundable work credit. 
These two credits simplify and improve the current child credit and 
earned income tax credit.
  I believe the Tax Code must also give Americans a fair opportunity to 
save part of their earnings. By taking the taxes off of savings, we 
will increase the savings rate and ultimately reduce the cost of 
capital.
  My proposal encourages savings by allowing everyone to contribute to 
an unlimited Roth IRA. It also repeals the individual and corporate 
alternative minimum tax, Federal death and gift taxes.
  Mr. Speaker, as you can see, the individual tax system, under my 
proposal, is designed to be simple. The tax return will be short, only 
a page or two for most people; but, more importantly, the tax return 
will be comprehensible.
  My proposal also contains a new and better way of taxing corporations 
and other businesses that will allow them to compete and win in global 
markets in a way that exports American-made products, not American 
jobs.
  All businesses are taxed alike under our proposal at an 8 percent 
rate on the first $150,000 of profit, and a 12 percent on all amounts 
above that small business level. All businesses will be allowed a 
credit for the 7.65 percent payroll tax they pay under the current law.
  One of the most pro-growth elements in SUSAT is that all costs for 
plant equipment and inventory in the United States will be expensed in 
the year of purchase. This is important because investment in state-of-
the-art equipment is critical to manufacturing in a global economy.
  The other key component of SUSAT which will make American business 
more competitive is that it will be border-adjustable. In other words, 
SUSAT would end the perverse practice unique among our trading partners 
of taxing our own exports. All export sales income is exempt and all 
profits earned abroad can be brought back home for reinvestment in 
America without penalty.
  Because of a 12 percent import adjustment, all companies that produce 
abroad and sell back in the U.S. markets will be required to bear the 
same tax burden as companies that both produce and sell in the U.S. 
This policy would finally take away the bias in favor of imports built 
into our current tax structure, which, in my view, contributes 
dramatically to our trade deficit, which, in my view, continues to rise 
at record-breaking levels.

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