H. R. 2393
IN THE HOUSE OF REPRESENTATIVES
June 17, 2013
Mr. Fattah introduced the following bill; which was referred to the Committee on Ways and Means
To direct the Secretary of the Treasury to develop and present to Congress a legislative proposal to establish a consumption tax.
This Act may be cited as the
American Growth Tax Reform Act
Congress finds the following:
The United States, from its beginning in 1790 to the present, has been free of a national debt for only two years, 1834 and 1835.
After 1946, the national debt as a percentage of GDP declined, reaching a low of 32.5 percent in 1981.
The large budget deficits of the 1980s and 1990s reversed this trend and pushed the percentage to another high of 49.5 percent in 1993.
The Federal budget surpluses from fiscal year 1998 to fiscal year 2001 were used to retire a portion of the publicly held national debt.
Between fiscal year 1997 and fiscal year 2001, the publicly held portion of the national debt declined by more than $400 billion.
Since fiscal year 2002, a return to budget deficits has caused the debt to grow again.
The national debt has grown from 75.5 million in 1790 to $16,781,967,702,405.37, as of April 19, 2013.
Congress must consider innovative tax strategies to meet this fiscal challenge.
A consumption tax will assist in decreasing the total public debt outstanding by broadening the tax base to include revenue from untapped sources: foreign tourists, undocumented immigrants, the underground economy, and multi-million dollar business transactions.
Implementing a consumption tax would simplify the current tax system.
At least 84 countries subscribe to some form of consumption taxation, including Afghanistan, Albania, Australia, Austria, Azerbaijan, Bahamas, Bangladesh, Barbados, Belgium, Benin, Brazil, Brunei Darussalam, Burundi, Cameroon, Canada, Cape Verde, Chile, China, Comoros, Congo (DRC), Croatia, Cyprus, Denmark, Egypt, Ethiopia, Finland, France, Ghana, Germany, Greece, Guinea-Bissau, Indonesia, Ireland, Iran, Italy, Jamaica, Japan, Kenya, Korea, Kosovo, Kuwait, Laos, Latvia, Liberia, Lithuania, Luxemburg, Macedonia, Madagascar, Malaysia, Malta, Mexico, Morocco, Netherlands, New Zealand, Norway, Pakistan, Poland, Portugal, Qatar, Russian Federation, Saudi Arabia, Senegal, Serbia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sri Lanka, Sudan, Sweden, Switzerland, Tanzania, Thailand, Trinidad Tobago, Tunisia, Turkey, Uganda, Ukraine, Uruguay, United Kingdom, Vietnam, Zambia, and Zimbabwe.
Under a consumption tax, personal savings are excluded from the taxable base thereby rewarding taxpayers for saving.
Consumption tax legislative proposal
Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury shall develop and submit to Congress a legislative proposal to establish a consumption tax that is broad-based and progressive in nature.
Such proposal shall set forth the details of such a consumption tax and the rates that the Secretary estimates would eliminate the total public debt outstanding in 10 years, 20 years, and 30 years, respectively, under each of the following scenarios:
The consumption tax would be in addition to all Federal taxes in effect on the date of the enactment of this Act.
The consumption tax would replace the individual income tax imposed by section 1 of the Internal Revenue Code of 1986 on earned income (as defined in section 32(c)(2) of such Code).
The consumption tax would replace the corporate income tax imposed by section 11 of such Code.
Feasibility and comparative analysis
Such proposal shall also include—
an analysis of the feasibility of, any barriers to, and any advantages or disadvantages of, a Federal consumption tax, and
a comparative analysis of the function and character of consumption taxes in other countries that impose a consumption tax.