The Kemp Commission, headed by former
United States Secretary of Housing and Urban Development
The United States secretary of housing and urban development (or HUD secretary) is the head of the United States Department of Housing and Urban Development, a member of the president's Cabinet, and thirteenth in the presidential line of succe ...
Jack Kemp
Jack French Kemp (July 13, 1935 – May 2, 2009) was an American politician and a professional football player. A member of the Republican Party from New York, he served as Housing Secretary in the administration of President George H. W. Bu ...
, was a tax reform commission that recommended the current
Income tax in the United States
Income taxes in the United States are imposed by the federal government, and most states. The income taxes are determined by applying a tax rate, which may increase as income increases, to taxable income, which is the total income less allow ...
be replaced with a
flat tax
A flat tax (short for flat-rate tax) is a tax with a single rate on the taxable amount, after accounting for any deductions or exemptions from the tax base. It is not necessarily a fully proportional tax. Implementations are often progressiv ...
.
History
In 1995, the commission was set up by
Robert Dole
Robert Joseph Dole (July 22, 1923 – December 5, 2021) was an American politician and attorney who represented Kansas in the United States Senate from 1969 to 1996. He was the Republican Leader of the Senate during the final 11 years of his t ...
and
Newt Gingrich
Newton Leroy Gingrich (; né McPherson; born June 17, 1943) is an American politician and author who served as the 50th speaker of the United States House of Representatives from 1995 to 1999. A member of the Republican Party, he was the U ...
to study ways to encourage economic growth.
After Dole and Gingrich chose Kemp as chairman, each appointed four additional members to the commission.
During January 1996, the Kemp Commission reported on overhauling the tax system.
Proposal
The commission concluded that "a flat rate tax would not only be a fairer system for middle-income Americans but also would abolish income taxes for relatively poor people by providing for a generous personal exemption."
The Kemp Commission laid out 6 "points of policy" in its proposal:
* A single tax rate
* Large personal and dependent exemptions to remove lower-income people from the tax rolls
* Lower tax rates for families
* Allowing workers to deduct Social Security and Medicare payroll taxes
* Ending taxation of interest, dividends and capital gains
* Requiring a two-thirds majority in Congress to raise the tax rate.
Response
William G. Gale wrote in a response for the
Brookings Institution
The Brookings Institution, often stylized as simply Brookings, is an American research group founded in 1916. Located on Think Tank Row in Washington, D.C., the organization conducts research and education in the social sciences, primarily in ec ...
that "the report is symptomatic of the whole debate on tax reform: there is widespread agreement on the principles of tax reform, much less agreement on what those principles mean in practice, and perhaps very little on how to trade off one principle against another. But the revenue estimates provided above suggest that all of the stated goals of the commission cannot be achieved simultaneously: choices will have to be made between desirable features of the rate structure, the tax base, and extent and direction of social policy."
Accounting firm,
Coopers & Lybrand
PricewaterhouseCoopers is an international professional services brand of firms, operating as partnerships under the PwC brand. It is the second-largest professional services network in the world and is considered one of the Big Four accounting ...
, concluded "that a flat tax offering exemptions for homeownership, charitable contributions, investments, payroll taxes and other priorities favored by the panel would require a rate of at least 25 percent to keep from adding to the deficit."
See also
*
Tax reform
Tax reform is the process of changing the way taxes are collected or managed by the government and is usually undertaken to improve tax administration or to provide economic or social benefits. Tax reform can include reducing the level of taxatio ...
References
External links
Kemp Commission: Damn the Deficit, Full Speed Backwardsby
Citizens for Tax Justice
Citizens for Tax Justice (CTJ) is a Washington, D.C.-based think tank and advocacy group founded in 1979 focusing on tax policies and their impact. CTJ's work focuses primarily on federal tax policy, but also analyzes state and local tax policie ...
{{Authority control
1995 establishments in the United States
Organizations established in 1995
Tax reform in the United States
Jack Kemp