Tax Simplification Act

Summary

Tax Simplification Act - Title I: Simplification of Individual Income Tax - Amends the Internal Revenue Code to repeal the income tax tables. Provides for an income tax rate of 14 percent for all individuals, estates, and trusts. Redefines "adjusted gross income" to eliminate the deductions from gross income for the following: (1) long-term capital gains; (2) moving expenses; (3) retirement savings; and (4) repayments of supplemental unemployment compensation benefits. Defines "allowable itemized deductions" as any deduction attributable to: (1) expenses for the production of income; (2) contributions to a church or convention or association of churches; (3) medical and dental expenses; and (4) alimony or separate maintenance payments. Repeals the deductions for: (1) interest, taxes, and depreciation of cooperative housing; (2) moving expenses; (3) retirement savings; (4) adoption expenses; and (5) long-term capital gains. Repeals the tax exclusion of: (1) certain death benefits; (2) gifts and inheritances; (3) income from discharge of indebtedness; (4) recovery of bad debts, prior taxes, and delinquency amounts; (5) income of States and municipalities; and (6) certain contributions to capital of a corporation. Modifies the medical expense deduction to allow a deduction only for medical expenses which exceed ten percent of a taxpayer's adjusted gross income (previously three percent of adjusted gross income). Title II: Reduction of Estate and Gift Tax Rates - Repeals the estate and gift tax tables. Provides for a tax rate of 14 percent for all estates and gifts. Decreases from $192,800 to $84,000 the unified credit against the estate and gift taxes, after 1986. Provides for a phase-in of such amount in taxable years 1983 through 1986.

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1 official file

• Introduced in House

  summary · EN · 22 October 1981

  Open at official source

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