Menu
Tax Notes logo

Senators Forward Return-Free Filing Proposal to Treasury

NOV. 21, 2002

Senators Forward Return-Free Filing Proposal to Treasury

DATED NOV. 21, 2002
DOCUMENT ATTRIBUTES
  • Authors
    Dorgan, Sen. Byron L.
    Gregg, Sen. Judd
    Durbin, Sen. Richard J.
  • Institutional Authors
    United States Senate
  • Cross-Reference
    For the text of Assistant Treasury Secretary Pamela F. Olson's Dec.

    9, 2002 response, see Doc 2002-27119 (3 original pages).
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2002-27115 (29 original pages)
  • Tax Analysts Electronic Citation
    2002 TNT 239-27
November 21, 2002

 

The Honorable Paul O'Neill

 

Secretary

 

Department of the Treasury

 

1500 Pennsylvania Avenue, N.W.

 

Washington, D.C. 20220

 

 

Dear Mr. Secretary:

 

 

[1] Recent press reports suggest that the Administration is hard at work on a package of tax simplification proposals for possible consideration in the next Congress. Most Americans are extremely frustrated with the current tax system and would welcome new approaches to simplify it.

[2] We are writing to urge you to consider adding a tax return-free filing option -- similar to legislation (S. 551) that we have authored -- to any major simplification initiative that you are planning to recommend to President Bush in the coming months. Our plan, called the Fair and Simple Shortcut Tax (FASST) plan, would give most taxpayers the option to pay their federal income taxes without having to prepare a return. More than 30 countries already enable their citizens to pay their federal taxes this way. We believe that our federal tax system can work along this line too.

[3] We have discussed the FASST plan previously, most recently this past Spring when you appeared before the Senate Treasury-General Government Appropriations Subcommittee. We'd like to take a moment to remind you how it would work.

[4] We can give an estimated 70 million taxpayers the option of not filing a federal income tax return next April, but instead have their exact tax liability for the year withheld at work if they so choose.

[5] Under the FASST plan, an employee could fill out a slightly modified W-4 at work. Using tables provided by the IRS, employers would determine an employee's exact tax obligation at a single low rate on wages, after applying several popular deductions such as the standard deduction, personal exemptions, and child credits, along with a deduction for home mortgage interest expenses and property taxes.

[6] Not only is the necessity of filing a federal income tax return eliminated under the FASST plan, but the alternative minimum tax and marriage penalty would be eliminated immediately for those who elect it. The plan also creates an incentive for savings and investments by exempting from taxes up to $5,000 in capital gains, dividends, and other nonwage income.

[7] One of the most important features of the FASST plan is that it would be optional. If a taxpayer prefers the current system, he or she could file under the current system just like any other year. The choice would be theirs. Taxpayers who continue to file under the old system would also get some needed tax relief under the FASST plan.

[8] Early next year, tens of millions of taxpayers will begin the process of wading through forms and reams of complicated IRS instructions in order to fill out their tax returns. It is estimated that taxpayers will spend some $100 billion and over 3 billion hours this year trying to comply with their tax obligation.

[9] It is inexcusable that it is so expensive and complex for Americans to fulfill this basic duty. The FASST plan offers a reasonable way to make April 15th just another day for tens of millions of taxpayers.

[10] Mr. Secretary, thank you for your consideration of this request. We have enclosed a copy of our legislation for your review. We would be happy to visit with you more about the merits of our approach, or provide other information that you may require.

Sincerely,

 

 

Byron L. Dorgan

 

U.S. Senator

 

 

Judd Gregg

 

U.S. Senator

 

 

Richard J. Durbin

 

U.S. Senator

 

Enclosure

[Editor's note: S. 551 previously appeared on 2001 TNT 73-95 Database 'Tax Notes Today 2001', View '(Number'.]

DOCUMENT ATTRIBUTES
  • Authors
    Dorgan, Sen. Byron L.
    Gregg, Sen. Judd
    Durbin, Sen. Richard J.
  • Institutional Authors
    United States Senate
  • Cross-Reference
    For the text of Assistant Treasury Secretary Pamela F. Olson's Dec.

    9, 2002 response, see Doc 2002-27119 (3 original pages).
  • Code Sections
  • Subject Area/Tax Topics
  • Jurisdictions
  • Language
    English
  • Tax Analysts Document Number
    Doc 2002-27115 (29 original pages)
  • Tax Analysts Electronic Citation
    2002 TNT 239-27
Copy RID