Impact on American Families

The Impact of Sensible Tax Reform upon American Families

Americans and their families are the principal victims of our country’s complex, unfair and economically ineffective federal tax system of income, Social Security, Medicare and estate taxes. The poor are victimized by high Social Security and Medicare taxes on every dollar they earn, and may owe income taxes as well—despite living at the poverty line or below. America’s middle class pays a disproportionate share of federal taxes, often a much higher average tax rate than do the richest members of our society. Many of the biggest tax loopholes (e.g., a 15% tax on dividends and capital gains as well as the $500,000 of tax-free capital gains on the sale of a house) primarily benefit the wealthy. Yet even many of the wealthy can be victimized by our estate-tax system which treats the very rich much more generously than the “merely” rich.

Sensible Tax Reform will bring revolutionary changes to the federal taxes of households:

• There will be an elimination of:


• All Social Security and Medicare taxes,
• All estate taxes,
• All income-tax credits, deductions, exclusions and special tax rates (except charitable donations),
• The alternative minimum tax, and
• The marriage penalty.


• Social Security and Medicare costs will shift to the general federal budget.
• All taxpayers will be treated alike, with the same tax rules applying to everyone.
• All income will be taxed alike (including dividends, capital gains and inheritance).
• There will be a $1,000,000 annual income exemption for personal income taxes.
• There will only be three personal income-tax levels: 15%, 25% and 35%.

STR will greatly improve the finances of American families. Incomes and standards of living will increase. The rules will be simple. It will be very difficult for any group to manipulate the tax system for their own advantage and the disadvantage of others. There will be a great reduction in the sense of unfairness that exists with the current tax system.