HR 1040 115th Congress House Taxation Employment taxes Income tax deductions Income tax rates Legislative rules and procedure Tax reform and tax simplification Transfer and inheritance taxes

Flat Tax Act

Introduced: February 14, 2017 See on congress.gov

Everywhere this bill has been 2 steps

Introduced

In committee

Reported out

Passed House

Passed Senate

To President

Became law

Feb 14, 2017

Referred to the Committee on Ways and Means, and in addition to the Committee on Rules, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Feb 14, 2017

Introduced in House

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Plain-English summary Congressional Research Service

Flat Tax Act

This bill amends the Internal Revenue Code to authorize an individual or a person engaged in business activity to make an irrevocable election to be subject to a flat tax (in lieu of the existing income tax provisions) of 19% for the first two years after an election is made, and 17% thereafter.

The bill calculates taxable income for individual taxpayers by subtracting a basic standard deduction and an additional standard deduction for each dependent from the total of wages, retirement distributions, and unemployment compensation. "Business taxable income" is gross active income reduced by certain deductions for the cost of business inputs, wages, and retirement contributions.

The bill imposes an employer tax on the value of excludable compensation provided to employees not engaged in business activity of 19% for the first two years after an election is made under this bill and 17% thereafter.

The bill also repeals the estate, gift, and generation-skipping transfer taxes.

A two-thirds vote of the House of Representatives and the Senate is required to increase the flat tax rate proposed by this bill or to reduce the amount of the standard deduction or business-related deductions allowed by this bill.

What's happening now February 14, 2017

Bill text 1 version