Summary: S.1040 — 108th Congress (2003-2004)All Information (Except Text)

There is one summary for S.1040. Bill summaries are authored by CRS.

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Introduced in Senate (05/12/2003)

Tax Simplification Act of 2003 - Amends the Internal Revenue Code to impose a 19 percent tax (17 percent after December 31, 2004) on the taxable income of every individual.

Redefines "taxable income" to mean the amount by which wages, retirement distributions, and unemployment compensation exceed the standard deduction. Increases the basic standard deduction and includes an additional standard deduction for dependents. Includes in taxable income the taxable income of each dependent child under the age of 14.

Replaces the current tax on corporations with a tax on every person engaged in a business activity equal to 19 percent (17 percent after December 31, 2004) of the business taxable income of such person. Makes the person engaged in the business activity liable for the tax.

Imposes a tax of 19 percent (17 percent after December 31, 2004) on the value of excludable compensation provided during the year by an employer for the benefit of employees. Makes the employer liable for the tax.

Repeals specified provisions: (1) relating to pension plans; and (2) imposing a tax on any employer reversion from a qualified plan.

Revises requirements regarding transfers of excess pension assets.

Repeals provisions respecting: (1) alternative minimum tax; (2) tax credits; (3) estate and gift taxes; and (4) subject to exception, normal taxes and surtaxes.

Makes it not in order in the House of Representatives or the Senate, unless waived or suspended in the House or the Senate by a three-fifths vote of the Members, to consider any bill, joint resolution, amendment thereto, or conference report thereon that includes any provision that increases an income tax rate, creates an additional tax rate, reduces the standard deduction, or provides any exclusion, deduction, credit, or other benefit that results in a reduction in Federal revenues.