[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[House]
[Page 1540]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       SIMPLIFIED USA TAX, SUSAT

  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, tonight I would like to 
talk about our current Tax Code and its discontent, a tax system that 
has stifled economic growth, has encumbered our resources and miles of 
red tape and needlessly burdened working Americans.
  Our Tax Code is too complicated and is riddled with obvious 
inequities. It punishes savings and investment, reducing economic and 
job growth; and it burdens domestic industry struggling to remain 
competitive.
  As a member of the Ways and Means Committee, I have long advocated a 
tabula rasa approach to the Tax Code, a complete overhaul grounded in 
first principles. Our objective must be to replace the current 
antiquated tax system with one that can sustain a free capitalist 
society in the 21st century. That means a Tax Code that is simple, 
fair, and stable.
  The new Tax Code I have developed, the Simplified USA Tax Act, or 
SUSAT, puts the right incentives in place to grow our economy and 
ultimately raise our standard of living. In fact, many of the 
provisions included in my bill were recommended by the President's 
advisory panel on Federal tax reform as part of their growth and 
investment plan.
  My proposal has three key components. First, it simplifies the code 
by a factor of about 75 percent. Second, it takes the taxes off of 
savings to promote thrift and avert a national savings crisis. Third, 
it makes America significantly more competitive, thereby creating 
better jobs within our borders.
  The Simplified USA Tax starts out with just three simple low rates: 
15 percent at the bottom, 25 percent in the middle, and 30 percent at 
top. Through a payroll tax credit to all wage earners, SUSAT 
effectively lowers the income tax rates to about 7 percent to 17 
percent for nearly all Americans.
  Under my proposal, and this is one significant departure from the 
President's panel recommendation, everyone gets a deduction for the 
mortgage interest on their home. In addition, the SUSAT tax 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 much simpler than the status quo.
  The tax return will be short: only a page or two for most people. But 
more importantly, the tax return will be understandable. 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 would be taxed alike at an 8 percent rate on the first 
$150,000 of profit, and at 12 percent on all amounts above that small 
business level. All businesses will be allowed a credit toward the 7.65 
percent payroll tax that they pay under current law.
  One of the most pro-growth elements in SUSAT is that all costs for 
plant and equipment and inventory in the United States will be expensed 
in the year of purchase. This is important because investment and 
state-of-the-art equipment is critical to manufacturing in a global 
economy.
  The other key component of SUSAT that will make American business 
more competitive is that it is 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 into U.S. markets will be required to bear the 
same tax as companies that both produce and sell in the United States. 
This policy would finally take away the bias in favor of imports built 
into our current tax structure, which, in my view, contributes to our 
record trade deficit that continues to rise to record-breaking levels.
  For too long, the Tax Code has been a needless drag on the economy. 
This is a curious paradox, and certainly not fair to those Americans 
whose living standards are lower because of it. The time has come for 
fundamental change.
  In the coming weeks, I will outline more details about this tax 
system and why we need to move forward today with tax reform.

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