“Tax Day serves as a disappointing reminder that our nation has not enacted tax reform in 30 years, highlighting the need for a willing partner in the White House to work with Republicans on making our tax code simpler,” the senior senator from Alabama posted. “The IRS estimates that the average individual tax return takes 8 hours to complete – further evidence that our tax code is unnecessarily complex, confusing, and inefficient.”
Shelby went on to propose that the current system should be replaced by a flat tax – an idea floated for years by brilliant minds such as Milton Friedman and Steve Forbes. A true flat tax applies the same percentage to individuals across all income levels with few or no deductions.
“This Congress, and every Congress since I was elected to the Senate, I introduced legislation to establish a flat tax of 17% on all income,” Shelby continued. “The ‘Simplified, Manageable, and Responsible Tax (SMART) Act’ is a straightforward solution that would require taxpayers to only file a simple postcard size return, which would save Americans time and money as well as create broad-based lower tax rates.”
In a press release on his website, Shelby describes the SMART system and what deductions would exist. With a 17 percent flat rate applied across the board, the exemptions would be:
• $14,480 for a single person;
• $18,490 for a head of household;
• $28,960 for a married couple filing jointly; and
• $6,240 for each dependent
The legislation also provides that the above allowances be indexed to inflation. Senator Shelby stated in the release that he believes that this plan – by closing loopholes for individuals and businesses – would create broad-based lower tax rates that would give American individuals and businesses a competitive edge, a boost in job creation, and reduce the use of offshore tax shelters.