Kemp Commission

Taxation in the United States of America
This article is part of a series on

Federal taxation Alternative minimum tax Capital gains tax Corporate tax Estate tax Excise tax Gift tax Income tax Payroll tax Internal Revenue Service (IRS) Internal Revenue Code (IRC) IRS tax forms Revenue by state History Constitutional authority Taxpayer standing Court Protest Evasion
State and local taxation State income tax Property tax Sales tax Use tax Land value tax State tax levels
Federal tax reform Automated payment transaction tax 9–9–9 Competitive Tax Plan Efficient Taxation of Income FairTax Flat tax Hall–Rabushka flat tax Kemp Commission Taxpayer Choice Act USA Tax Value added tax
United States portal

The Kemp Commission, headed by former United States Secretary of Housing and Urban Development Jack Kemp, was a tax reform commission that recommended the current Income tax in the United States be replaced with a flat tax.^[1]

History

In 1995, the commission was set up by Robert Dole and Newt Gingrich to study ways to encourage economic growth.^[2] After Dole and Gingrich chose Kemp as chairman, each appointed four additional members to the commission.^[3] During January 1996, the Kemp Commission reported on overhauling the tax system.^[2]

Proposal

The commission concluded that "a flat rate tax would not only be a fairer system for middle-income Americans but also would abolish income taxes for relatively poor people by providing for a generous personal exemption."^[4]

The Kemp Commission laid out 6 "points of policy" in its proposal:

A single tax rate
Large personal and dependent exemptions to remove lower-income people from the tax rolls
Lower tax rates for families
Allowing workers to deduct Social Security and Medicare payroll taxes
Ending taxation of interest, dividends and capital gains
Requiring a two-thirds majority in Congress to raise the tax rate.^[5]

Response

William G. Gale wrote in a response for the Brookings Institution that "the report is symptomatic of the whole debate on tax reform: there is widespread agreement on the principles of tax reform, much less agreement on what those principles mean in practice, and perhaps very little on how to trade off one principle against another. But the revenue estimates provided above suggest that all of the stated goals of the commission cannot be achieved simultaneously: choices will have to be made between desirable features of the rate structure, the tax base, and extent and direction of social policy."^[2]

Accounting firm, Coopers & Lybrand, concluded "that a flat tax offering exemptions for homeownership, charitable contributions, investments, payroll taxes and other priorities favored by the panel would require a rate of at least 25 percent to keep from adding to the deficit."^[6]

References

↑ "Kemp Commission". NPR. January 17, 1996.
1 2 3 Gale, William (February 5, 1996). "THE KEMP COMMISSION AND THE FUTURE OF TAX REFORM." (PDF). Brookings Institution.
↑ "Dole, Gingrich tap Kemp for reform review". Daily news. April 7, 1995.
↑ Torry, Jack (January 18, 1996). "Kemp commission endorses single U.S. tax rate". Pittsburgh Post-Gazette.
↑ "Flat-tax system gets backing of Kemp Commission". Reading Eagle. January 18, 1996.
↑ Chandler, Clay (January 21, 1996). "On the Road to a Flat Tax, a Curve or Two". Washington Post.

External links

Kemp Commission: Damn the Deficit, Full Speed Backwards by Citizens for Tax Justice

This article is issued from Wikipedia - version of the 2/26/2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.