Terminating the Current Tax Code by the End of 2021 (H.R. 29)
Do you support or oppose this bill?
What is H.R. 29?
(Updated November 22, 2020)
This bill would terminate the Internal Revenue Code of 1986 after December 31, 2021 — except for self-employment taxes, Federal Insurance Contributions Act (FICA) taxes, and railroad retirement taxes.
The bill lays out a general framework for what the new federal tax system should look like, stressing that it should be a "simple and fair" system that:
Applies a low rate to all Americans;
Provides tax relief for working Americans;
Protects taxpayer rights and reduces tax collection abuses;
Eliminates bias against savings and investment;
Promotes economic growth and job creation;
Does not penalize marriage or families.
That said, the four page bill doesn't offer a detailed plan for what should come in place of the current tax code.
Congress would be required to approve the final version of the new federal tax system by July 4, 2021. If passed, a two-thirds majority vote in Congress would be required to change the December 2021 termination date for the tax code.
Argument in favor
The current tax code is a labyrinth of loopholes and penalties that is utterly incomprehensible. A new tax code based on lower rates will benefit taxpayers — and this bill makes the time to get it done.
Argument opposed
Bad things happen when Congress sets itself arbitrary deadlines, and if this bill were to pass and Congress couldn’t the new tax code passed in time, the uncertainty could be catastrophic for the economy.
Impact
Taxpayers; the Internal Revenue Service (IRS); and Congress.
Cost of H.R. 29
A CBO cost estimate is unavailable.
Additional Info
In-Depth: A version of this bill has been introduced into Congress many times over the past years, dating back at least as far as the Clinton administration. During the 114th Congress this legislation gained 81 cosponsors in the House, although it never received a vote.
Of Note: According to the Standard Federal Tax Reporter — a compilation created by the legal publisher Commerce Clearing House (CCH) — the current federal tax code comprises 70,000 pages of statutes, regulations, and case-law.
The Tax Foundation estimated that in 2012 individuals and businesses spent more than 3.24 billion hours (which is 369,858 - if you were wondering) preparing and filing tax returns. The IRS’s National Taxpayer Advocate put the annual paperwork burden for federal taxes at over 6 billion hours in 2014, and the National Taxpayer Union converted this figure into $224 billion spent by taxpayers each year on tax compliance.
A study done by the Mercatus Center found that the U.S. had a tax-reporting compliance rate of 85.5 percent in 2012, amounting to $452 billion in unreported taxes. It also concluded that the number of changes to the tax code (more than one per day), created hidden compliance costs ranging between $215 billion and $987 billion per year.
Media:
- Sponsoring Rep. Bob Goodlatte (R-VA) Press Release (Previous Version)
-
Countable YouTube
- Forbes (Previous Version)
- National Review (Previous Version)
- TPM (Previous Version)
- Let Freedom Ring (In Favor)
- National Taxpayer Union (In Favor)
Summary by Eric Revell
(Photo Credit: Flickr user JD Hancock)
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