[Congressional Record Volume 157, Number 55 (Thursday, April 14, 2011)]
[Senate]
[Pages S2510-S2511]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SHELBY:
  S. 820. A bill to repeal the current Internal Revenue Code and 
replace it with a flat tax, thereby guaranteeing economic growth and 
greater fairness for all Americans; to the Committee on Finance.
  Mr. SHELBY. Mr. President, I rise today to once again introduce my 
flat tax bill, the Smart, Manageable and Responsible Tax Act, referred 
to as the SMART Act.
  In the United States, there are few, if any, days that are viewed 
with the same resentment and contempt year after year as April 15: 
national tax day.
  Our current Tax Code totals more than 70,000 pages, making tax 
compliance unnecessarily complex, confusing and costly. During the past 
10 years, there have been over 4,400 changes to the Tax Code, including 
an estimated 579 changes in 2010 alone.
  The inclusion of the additional 1099 tax reporting requirements in 
the health care reform bill are just one example of the onerous 
requirements throughout our Tax Code.
  As we have learned since the passage of these requirements last 
March, incremental improvements to the Tax

[[Page S2511]]

Code are not easy. It took Congress over a year to finally agree to 
repeal the 1099 changes that common sense tells us are essential to 
alleviating the burdens on small business. Yet our Tax Code is riddled 
with other similarly ill-conceived requirements.
  Over the course of a year, individuals spend an average of 26 hours, 
over half of a work week, preparing for their tax filings.
  Although this has been standard practice for decades, I do not 
believe average taxpayers should have to pore over IRS regulations for 
hours or pay someone to prepare their returns. Unfortunately, under our 
convoluted tax system they are left with little choice.
  I have said a number of times before that our current tax system is 
unfair. It punishes success and stifles economic growth. The best 
remedy is to adopt a single tax rate for all taxpayers. Transitioning 
to a flat tax would not only increase fairness in the Tax Code, it 
would also increase the incentives to work and invest.
  By eliminating the thousands of tax loopholes, deductions, and 
credits that can often only be utilized with extensive tax planning and 
expensive advisers, hardworking Americans can rest assured that 
corporations with billions of dollars in profit and sophisticated 
taxpayers are not able to unfairly reduce or eliminate their tax 
liabilities and leave middle-class Americans footing the bill.
  The SMART Act also reforms our corporate Tax Code. The United States 
currently has the second highest corporate tax rate in the world. 
American companies routinely make the difficult decision to move 
operations overseas to reduce their tax burden. Under my legislation, 
companies would pay a flat tax rate of 17 percent on their profits. 
Cutting the corporate tax rate in half would increase domestic 
companies' competitiveness with foreign corporations and eliminate the 
incentives to shift jobs overseas.
  This bill provides a simple, commonsense solution to the complexities 
and inequities of the current tax system. Taxpayers would be able to 
determine their tax liability quickly and easily, and file a tax return 
the size of a postcard.
  The SMART Tax would repeal the current Internal Tax Code and replace 
it with a single tax rate for all taxpayers of 17 percent on all 
salaries, wages, and pensions. The only exemptions would be a personal 
exemption of $13,410 for a single person; $17,120 for a head of 
household; $26,810 for a married couple filing jointly; and $5,780 for 
each dependent, with these amounts indexed to inflation.
  Additionally, under my legislation, earnings from savings and 
investments would not be included in taxable income. Eliminating this 
double taxation would increase the savings rate in our country and 
immediately spur investments in the economy, create jobs and boost 
economic growth.
  Approximately 60 percent of individual taxpayers now pay preparers to 
complete their taxes for them. An additional 29 percent of individuals 
use tax software to assist with their filings. What this means for most 
people is that in addition to paying the government every year, they 
must pay someone or buy software to tell them exactly how much to pay 
their government.
  The American people want and need fundamental tax reform that would 
save time and money and bring fairness to our tax structure. The 
legislation I am introducing today would implement much-needed reforms 
that eliminate onerous paperwork and promote economic growth in our 
country.
  I recognize that this bill is a monumental shift away from our 
current tax laws, but our economy needs a boost, and we must not allow 
the enormity of the task to deter us from enacting better, more 
efficient tax laws. I urge my colleagues to join me in support of this 
legislation.
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