SMART Act

Shelby, Richard C.

Simplified, Manageable, And Responsible Tax Act or the SMART Act This bill&nbsp;replaces the marginal income tax rates in the Internal Revenue Code&nbsp;with a single rate of 17% on individual taxable income. The bill redefines taxable income to mean the amount by which wages, retirement distributions, and unemployment compensation exceed the standard deduction. It also <ul> <li>increases the basic standard deduction, </li> <li>includes an additional standard deduction for dependents, and </li> <li>includes the taxable income of each dependent child under the age of 14 in an individual's taxable income. </li></ul> The bill revises the tax on corporations to (1) replace it with a tax on every person engaged in a business activity equal to 17% of the business taxable income of such person; and (2) make the person engaged in the business activity liable for the tax, whether or not such person is an individual, a partnership, or a corporation. The bill imposes on employers a 17% tax on the value of excludable compensation provided during the year to employees. With respect to pension rules, the bill (1) repeals rules relating to non-discrimination, contribution limits, and restrictions on distributions; and (2) revises rules relating to transfers of excess pension assets. The bill also repeals <ul> <li>the alternative minimum tax; </li> <li>all income tax credits; </li> <li>estate, gift, and generation-skipping transfer taxes; and </li> <li>income tax provisions, except certain provisions relating to retirement distributions and tax-exempt organizations. </li></ul> The bill prohibits Congress from considering legislation to make specified changes to tax policy unless Congress waives or suspends the prohibition with a three-fifths vote.