Taxes

Senator Wyden strongly believes that the time has come for Congress to fix our broken tax code.  Since 1986, when Congress last fixed the tax code, there have been approximately 15,000 changes made – the equivalent of three changes for every working day of Congress.  The tax code has become so complicated that taxpayers now spend more time on tax preparation every year than American workers spend manufacturing cars, computers, airplanes and steel combined.

That is why Senator Wyden introduced the Fair Flat Tax Act.  American taxpayers deserve an understandable, equitable system that provides real tax relief to the middle-class. His plan would treat work and wealth equally, and would also begin to reduce the federal deficit.

The Fair Flat Tax would make the U.S. tax code simpler, flatter and fairer. It takes the best features of a flat tax -- the simplicity that boosts compliance and improves administrative efficiency – and eliminates the inequities and costs associated with it. 

The Fair Flat Tax Act of 2007 would allow every taxpayer to file taxes on a simplified, one-page 1040 form that would take minutes to complete. Under the plan, the six individual tax brackets would be reduced to three – 15 percent, 25 percent, and 35 percent – and businesses would pay a single, flat corporate rate of 35 percent. Senator Wyden's proposal would also eliminate the Alternative Minimum Tax, sparing millions of middle class from paying tax rates originally intended only for the extremely wealthy.

By simplifying the tax code, the Fair Flat Tax eliminates many of the loopholes and preferences that corporations use to avoid paying their fair share. At the same time, the plan keeps the critical individual credits and deductions for individuals including mortgage interest, charitable contributions, credits for children, and earned income.

Ultimately, the Fair Flat Tax would make the tax code fairer and would provide a major tax cut for 70 percent of Americans. More information on the Fair Flat Tax is available here.

Senator Wyden was also the author of the Internet Tax Freedom Act, which was first enacted into law in 1998. The bill prevents federal, state and local governments from levying multiple and discriminatory taxes on electronic commerce. Three types of taxes are specifically prohibited under the law: taxes on Internet access; double taxation (for example, by two or more states) of a product or service bought over the Internet; and discriminatory taxes that treat Internet purchases differently from other types of sales.

The bill included a sunset date that has been extended twice – once in 2001 and again in 2004. Both extensions passed with broad bipartisan support in the House of Representatives and Senate. A permanent moratorium on Internet taxation passed through the Senate Commerce and Finance Committees in the 109th Congress but unfortunately did not come up for a vote on the Senate floor. Efforts are underway to extend the moratorium further.

The Internet Tax Freedom Act has saved American taxpayers $4.6 billion since its enactment in 1998.

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