Summary: S.1038 — 104th Congress (1995-1996)All Information (Except Text)

There is one summary for S.1038. Bill summaries are authored by CRS.

Shown Here:
Introduced in Senate (07/14/1995)

TABLE OF CONTENTS:

Title I: Flat Tax

Title II: Reductions in Federal Spending

Flat Tax Act of 1995 - Title I: Flat Tax - Amends the Internal Revenue Code to impose a 15 percent tax on the income of every individual. Establishes a basic standard exemption of $20,000 for a joint return and $10,000 for an individual return, with an additional $5,000 exemption for each dependent. Sets forth provisions for a transition rule for home mortgage interest deduction with respect to existing mortgages.

Imposes on every person engaged in a business activity a tax equal to 15 percent of business taxable income.

Repeals all specific exclusions from gross income, all deductions, and all credits against income tax to the extent related to the computation of corporate and individual income tax liability.

Repeals estate, gift, and generation-skipping taxes.

Title II: Reductions in Federal Spending - Directs the President to reduce the discretionary spending limits the Congressional Budget Act of 1974 for each of FY 1996 through 1998 to reflect a reduction of 15 percent in budget authority and budget outlays for each fiscal year. Specifies that notwithstanding the above, the amount of budget authority provided for foreign aid payments not required by law shall not exceed: (1) for FY 1996, 60 percent of the amount provided for FY 1995; (2) for FY 1997, 50 percent of the amount provided for FY 1995; and (3) for FY 1998, 40 percent of the amount provided for FY year 1995. Requires that notwithstanding discretionary spending limits above, the amount of budgetary authority provided for the Defense Department for payments not required by law for each of FY 1996 through 1998 shall not exceed the amount provided for FY 1995. Directs that the amount of budget authority provided for the administrative expenses of the Social Security Administration and Medicare for payments not required by law for each of FY 1996 through 1998 shall not be reduced. Provides that a reduction in the level of direct spending for FY 1996 through 1998 shall not exceed 85 percent of the level for FY 1995, except for: (1) Social Security; (2) Medicare; and (3) veterans's programs. Abolishes the Internal Revenue Service (IRS) and transfers the functions of the IRS to the Department of the Treasury. Transfers the functions of the IRS Commissioner to the Secretary of the Treasury.