110th CONGRESS
1st Session
S. 747
To terminate the Internal Revenue Code of 1986, and for other purposes.
IN THE SENATE OF THE UNITED STATES
March 2, 2007
Mr. ISAKSON (for himself, Mr. ALLARD, Mr. CHAMBLISS, Mr. CRAPO, and Mr.
GRAHAM) introduced the following bill; which was read twice and referred
to the Committee on Finance
A BILL
To terminate the Internal Revenue Code of 1986, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Tax Code Termination Act'.
SEC. 2. PURPOSE.
The purpose of this Act is to set a date certain for replacing the Internal
Revenue Code of 1986 with a simple and fair alternative.
SEC. 3. TERMINATION OF INTERNAL REVENUE CODE OF 1986.
(a) In General- No tax shall be imposed by the Internal Revenue Code of
1986--
(1) for any taxable year beginning after December 31, 2010; and
(2) in the case of any tax not imposed on the basis of a taxable year,
on any taxable event or for any period after December 31, 2010.
(b) Exception- Subsection (a) shall not apply to taxes imposed by--
(1) chapter 2 of such Code (relating to tax on self-employment income);
(2) chapter 21 of such Code (relating to Federal Insurance Contributions
Act); and
(3) chapter 22 of such Code (relating to Railroad Retirement Tax Act).
SEC. 4. NATIONAL COMMISSION ON TAX REFORM AND SIMPLIFICATION.
(a) Findings- The Congress finds the following:
(1) The Internal Revenue Code of 1986 is overly complex, imposes significant
burdens on individuals and businesses and the economy, is extremely difficult
for the Internal Revenue Service to administer, and is in need of fundamental
reform and simplification.
(2) Many of the problems encountered by taxpayers in dealing with the
Internal Revenue Service could be eliminated or alleviated by fundamental
reform and simplification.
(3) Recent efforts to simplify or reform the tax laws have not been successful
due in part to the difficulty of developing broad-based, nonpartisan support
for proposals to make such changes.
(4) Many of the problems with the Internal Revenue Service stem from the
overly complex tax code the agency is asked to administer.
(1) IN GENERAL- To carry out the purposes of this section, there is established
within the legislative branch a National Commission on Tax Reform and
Simplification (in this section referred to as the `Commission').
(2) COMPOSITION- The Commission shall be composed of 19 members (of which
not less than 4 members are from small businesses with less than 50 employees),
as follows:
(A) Three members appointed by the President, two from the executive
branch of the Government and one from the private sector.
(B) Four members appointed by the majority leader of the Senate, one
from Members of the Senate and three from the private sector.
(C) Four members appointed by the minority leader of the Senate, one
from Members of the Senate and three from the private sector.
(D) Four members appointed by the Speaker of the House of Representatives,
one from Members of the House and three from the private sector.
(E) Four members appointed by the minority leader of the House of Representatives,
one from Members of the House and three from the private sector.
(3) CHAIR- The Commission shall elect a Chair (or two Co-Chairs) from
among its members.
(4) MEETINGS, QUORUMS, VACANCIES- After its initial meeting, the Commission
shall meet upon the call of the Chair (Co-Chairs, if elected) or a majority
of its members. Eleven members of the Commission shall constitute a quorum.
Any vacancy in the Commission shall not affect its powers, but shall be
filled in the same manner in which the original appointment was made.
Any meeting of the Commission or any subcommittee thereof may be held
in executive session to the extent that the Chair (Co-Chairs, if elected)
or a majority of the members of the Commission or subcommittee determine
appropriate.
(5) CONTINUATION OF MEMBERSHIP- If--
(A) any individual who appointed a member to the Commission by virtue
of holding a position described in paragraph (2) ceases to hold such
position before the report of the Commission is submitted under subsection
(g); or
(B) a member was appointed to the Commission as a Member of Congress
and the member ceases to be a Member of Congress, or was appointed to
the Commission because the member was not an officer or employee of
any government and later becomes an officer or employee of a government,
that member may continue as a member for not longer than the 30-day period
beginning on the date that such individual ceases to hold such position
or such member ceases to be a Member of Congress or becomes such an officer
or employee, as the case may be.
(6) APPOINTMENT; INITIAL MEETING-
(A) APPOINTMENT- It is the sense of the Congress that members of the
Commission should be appointed not more than 60 days after the date
of the enactment of this Act.
(B) INITIAL MEETING- If, after 60 days from the date of the enactment
of this Act, eight or more members of the Commission have been appointed,
members who have been appointed may meet and select the Chair (or Co-Chairs)
who thereafter shall have the authority to begin the operations of the
Commission, including the hiring of staff.
(c) Functions of the Commission-
(1) IN GENERAL- The functions of the Commission shall be--
(A) to conduct, for a period not to exceed 18 months from the date of
its first meeting, the review described in paragraph (2); and
(B) to submit to the Congress a report of the results of such review,
including recommendations for fundamental reform and simplification
of the Internal Revenue Code of 1986, as described in subsection (g).
(2) REVIEW- The Commission shall review--
(A) the present structure and provisions of the Internal Revenue Code
of 1986, especially with respect to--
(i) its impact on the economy (including the impact on savings, capital
formation and capital investment);
(ii) its impact on families and the workforce (including issues relating
to distribution of tax burden);
(iii) the compliance cost to taxpayers, including small businesses
and corporations; and
(iv) the ability of the Internal Revenue Service to administer such
provisions;
(B) whether tax systems imposed under the laws of other countries could
provide more efficient and fair methods of funding the revenue requirements
of the government;
(C) whether the present income tax system should be replaced with a
flat tax, a national sales tax, or any other specified tax system;
(D) whether the Internal Revenue Code of 1986 can be simplified, absent
wholesale restructuring or replacement thereof; and
(E) the transition costs (including the length of time recommended for
a smooth transition) associated with any changes to the present Federal
tax system (both real and implied) which would be imposed on citizens,
businesses, and the Government.
(d) Powers of the Commission-
(1) IN GENERAL- The Commission or, on the authorization of the Commission,
any subcommittee or member thereof, may, for the purpose of carrying out
the provisions of this section, hold such hearings and sit and act at
such times and places, take such testimony, receive such evidence, and
administer such oaths, as the Commission or such designated subcommittee
or designated member may deem advisable.
(2) CONTRACTING- The Commission may, to such extent and in such amounts
as are provided in appropriation Acts, enter into contracts to enable
the Commission to discharge its duties under this section.
(3) ASSISTANCE FROM FEDERAL AGENCIES AND OFFICES-
(A) INFORMATION- The Commission is authorized to secure directly from
any executive department, bureau, agency, board, commission, office,
independent establishment, or instrumentality of the Government, as
well as from any committee or other office of the legislative branch,
such information, suggestions, estimates, and statistics as it requires
for the purposes of its review and report. Each such department, bureau,
agency, board, commission, office, establishment, instrumentality, or
committee shall, to the extent not prohibited by law, furnish such information,
suggestions, estimates, and statistics directly to the Commission, upon
request made by the Chair (Co-Chairs, if elected).
(B) TREASURY DEPARTMENT- The Secretary of the Treasury is authorized
on a nonreimbursable basis to provide the Commission with administrative
services, funds, facilities, staff, and other support services for the
performance of the Commission's functions.
(C) GENERAL SERVICES ADMINISTRATION- The Administrator of General Services
shall provide to the Commission on a nonreimbursable basis such administrative
support services as the Commission may request.
(D) JOINT COMMITTEE ON TAXATION- The staff of the Joint Committee on
Taxation is authorized on a nonreimbursable basis to provide the Commission
with such legal, economic, or policy analysis, including revenue estimates,
as the Commission may request.
(E) OTHER ASSISTANCE- In addition to the assistance set forth in subparagraphs
(A), (B), (C), and (D), departments and agencies of the United States
are authorized to provide to the Commission such services, funds, facilities,
staff, and other support services as they may deem advisable and as
may be authorized by law.
(4) POSTAL SERVICES- The Commission may use the United States mails in
the same manner and under the same conditions as departments and agencies
of the United States.
(e) Staff of the Commission-
(1) IN GENERAL- The Chair (Co-Chairs, if elected), in accordance with
rules agreed upon by the Commission, may appoint and fix the compensation
of a staff director and such other personnel as may be necessary to enable
the Commission to carry out its functions without regard to the provisions
of title 5, United States Code, governing appointments in the competitive
service, and without regard to the provisions of chapter 51 and subchapter
III or chapter 53 of such title relating to classification and General
Schedule pay rates, except that no rate of pay fixed under this subsection
may exceed the equivalent of that payable to a person occupying a position
at level V of the Executive Schedule under section 5316 of title 5, United
States Code. Any Federal Government employee may be detailed to the Commission
without reimbursement from the Commission, and such detailee shall retain
the rights, status, and privileges of his or her regular employment without
interruption.
(2) CONSULTANT SERVICES- The Commission is authorized to procure the services
of experts and consultants in accordance with section 3109 of title 5,
United States Code, but at rates not to exceed the daily rate paid a person
occupying a position at level IV of the Executive Schedule under section
5315 of title 5, United States Code.
(f) Compensation and Travel Expenses-
(A) IN GENERAL- Except as provided in subparagraph (B), each member
of the Commission may be compensated at not to exceed the daily equivalent
of the annual rate of basic pay in effect for a position at level IV
of the Executive Schedule under section 5315 of title 5, United States
Code, for each day during which that member is engaged in the actual
performance of the duties of the Commission.
(B) EXCEPTION- Members of the Commission who are officers or employees
of the United States or Members of Congress shall receive no additional
pay on account of their service on the Commission.
(2) TRAVEL EXPENSES- While away from their homes or regular places of
business in the performance of services for the Commission, members of
the Commission shall be allowed travel expenses, including per diem in
lieu of subsistence, in the same manner as persons employed intermittently
in the Government service are allowed expenses under section 5703(b) of
title 5, United States Code.
(g) Report of the Commission; Termination-
(1) REPORT- Not later than 18 months after the date of the first meeting
of the Commission, the Commission shall submit a report to the Committee
on Ways and Means of the House of Representatives and the Committee on
Finance of the Senate. The report of the Commission shall describe the
results of its review (as described in subsection (c)(2)), shall make
such recommendations for fundamental reform and simplification of the
Internal Revenue Code of 1986 as the Commission considers appropriate,
and shall describe the expected impact of such recommendations on the
economy. The measurement of such impact shall be made using both static
and dynamic scoring models.
(A) IN GENERAL- The Commission, and all the authorities of this section,
shall terminate on the date which is 90 days after the date on which
the report is required to be submitted under paragraph (1).
(B) CONCLUDING ACTIVITIES- The Commission may use the 90-day period
referred to in subparagraph (A) for the purposes of concluding its activities,
including providing testimony to committees of Congress concerning its
report and disseminating that report.
(h) Authorization of Appropriations- There is authorized to be appropriated
such sums as may be necessary for the activities of the Commission. Until
such time as funds are specifically appropriated for such activities, $2,000,000
shall be available from fiscal year 2008 funds appropriated to the Treasury
Department, `Departmental Offices' account, for the activities of the Commission,
to remain available until expended.
SEC. 5. TIMING OF IMPLEMENTATION.
In order to ensure an easy transition and effective implementation, the
Congress hereby declares that any new Federal tax system shall be approved
by Congress in its final form no later than July 4, 2010. If a new Federal
tax system is not so approved by July 4, 2010, then Congress shall be required
to vote to reauthorize the Internal Revenue Code of 1986.
END
