We
approach our 10th Anniversary
United
Californians for Tax Reform is approaching its 10th
anniversary. We were founded in 1994 to develop, qualify and
promote the passage of a flat tax initiative for California,
entitled "The Peoples Tax Reform". It limited tax
rates to 2.5% and 5.0% on personal Income with the higher rate
phased out over a five year period. It also indexed capital
gains and offered businesses with annual sales under $5
million the option of paying a tax of 0.25% of their gross
receipts rather than the tremendously complex corporate tax
forms.
Since
our founding, we have been able to influence in significant
ways the dialogue of tax reform at both the state and federal
levels. Here are some of our major accomplishments.
First,
we gave new impetus to the proposal for a 10% flat federal
income tax by showing that the federal government's
out-of-pocket expenses could be fully paid for by this low tax
rate if a separate surcharge were imposed to pay for service
of the national debt.
Second,
we pioneered the idea of changing and simplifying the tax
code, one tax form at a time. In this way we plan to encourage
an ever larger number of taxpayers to use simple forms and a
standard deduction rather than long forms and itemized
deductions. Taxpayers using the simple forms could quickly
exceed 75% of all California taxpayers, and each one of them will become
accustomed to a simple tax and may well therefore be expected
to favor a flat tax. The one-form-at-a-time approach has
worked at both the state and federal levels. In California, we
advocated broadening the group of taxpayers who could use the
simple form (540-EZ). And indeed, the state's taxing
authority, the Franchise Tax Board, eliminated the $400 limit
on interest income from the 540-EZ in 2002 and promised to
eliminate the limit on dividends in 2003. The US Treasury
Department, which prepares the federal tax forms, at our
request, began to reform the 1040EZ by raising the limit on
interest income from $400 to $1500 for 2002, allowing millions
of more taxpayers to use this simpler form.
Third,
we reignited the idea of indexing capital gains. Unlike other
tax reformers, we opposed the elimination of all tax on
capital gains, and instead recommended a 15% flat rate, which
in fact later was introduced by Congress in 2003. Congress
also reduced the tax rate on dividends to the same level,
which we had also suggested. Moreover, we believe that our
request to do the same for interest on bank certificates of
deposit, IRA distributions, and pension income was well
received when we presented this idea to key members of
Congress.
Fourth,
we introduced the concept of a voluntary simple tax for small
businesses based on their gross receipts as an alternative to
a net income tax (the U.S.'s current system) or a value added
tax (common in Europe). This proposal was set forth in our
"Peoples Tax Reform" initiative in 1994 and was
recently implemented in Russia.
Finally,
we broke new ground with our idea for a voluntary 15% flat tax
at the federal level as an alternative income tax for
individuals who wish to avoid the time, effort, complexity,
record keeping and paperwork of the present tax code.
We
continue to lobby to simplify taxes at both the federal and
state levels. Our most recent project is to qualify for the
ballot the Simple Tax Initiative to provide California
taxpayers with a simpler, better income tax alternative.
For
more information on our past activities and achievements,
please review some of the following documents:
1994
Peoples
Tax Reform Initiative
Replaced
the California tax code with a 2.5% flat tax phased in over
five years and offered small businesses with gross
receipts under 5 million dollars the option of paying a
tax on 0.25% of gross receipts in lieu of the 8.8% state
income tax.
1996
Sales
and Use Taxes: Personal Income and Bank and Corporation Taxes
Initiative
Replaced
the California tax code on personal income with a 2.5% flat
tax phased in over five years. Replaced the California
Corporate Tax and State Sales tax with a tax of 1.0 % on
Corporate gross receipts.
The
10 Percent Solution
A
presentation by Roland Boucher to the California Reform
party convention in Los Angeles California
The
10 Percent Solution - The right tax for the 21st Century
Remarks
by Roland Boucher to the Rotary club of Irvine California
October 17
AB
1673 (Tagasugi) Index Capital Gains
A
revised bill to index capital gains. passed in assembly rev
& tax committee
