Press Release

McHenry Co-Sponsors Taxpayer Choice Act

Legislation Repeals AMT, Gives Taxpayers Simple Alternative Tax Code

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Washington, October 10, 2007 | Wes Climer (202 225 2576) | comments
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Congressman Patrick McHenry (R-NC) today signed on as an original co-sponsor of the Taxpayer Choice Act of 2007.  This legislation repeals the Alternative Minimum Tax and gives taxpayers the option of choosing to participate in a highly simplified, efficient alternative tax code.

“The 16,485 page tax code we have right now is an outrage, and it is long past time for fundamental tax reform” said Congressman McHenry.  “This legislation puts us on track to accomplish that by giving taxpayers the option of participating in a tax code that doesn’t require an army of accountants and tax lawyers to understand.”

With this legislation, taxpayers would be able to choose between filing their taxes under the existing tax structure or under the Simplified Tax, which has two income tax rates: 10 percent for the first $100,000 earned by joint filers ($50,000 for single filers) and 25 percent for income exceeding those levels.

The distribution of total tax burdens remains largely unchanged with the Simplified Tax.  According to the House Budget Committee, the highest one fifth of earners will still pay roughly 70 percent of the federal tax burden; and the lowest one fifth of earners will still pay less than one percent.

By eliminating the Alternative Minimum Tax (AMT), the Taxpayer Choice Act also prevents an $841 billion tax increase on middle class families.

Designed in 1969 to stop 155 wealthy taxpayers from exploiting tax loopholes to avoid paying any taxes, the AMT is scheduled to subject nearly 30 million more Americans to an automatic tax increase next year because it was never indexed to inflation.  For instance, about 70 percent of families with children earning $75,000 to $100,000 will be subject to the AMT’s much higher tax rates next year if nothing is done to correct it.

Congressman McHenry co-sponsored this legislation along with several members of the Republican Study Committee, a group of more than 100 conservative Members of the House of Representatives.

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