By Brandon Moseley
Alabama Political Reporter
U.S. Senator Richard Shelby (R) from Alabama introduced dual legislative proposals to address our nation’s deep fiscal challenges on Wednesday.
Sen. Shelby introduced a Balanced Budget Amendment to the U.S. Constitution to address the runaway spending that is imperiling the fiscal health of the nation. If passed and ratified it would ensure that the federal government does not spend more money than it takes in each year.
Sen. Shelby also introduced a bill which would replace the existing tax code with a much simpler 17% flat tax on all income.
Sen. Shelby said, “We spend too much. We borrow too much. We tax too much. We need straightforward solutions to these clear problems. Instead of lurching from crisis to crisis and fixing nothing, we should carefully weigh and enact measures that will establish fiscal sanity, spark economic growth, and foster job creation. In my judgment, these proposals will revive our economy by reducing government spending and creating an environment conducive to private sector growth.”
The Shelby balanced budget amendment would require that the federal government not spend any more than it takes in and would cap federal spending at just 20% of the Gross Domestic Product (GDP). Under President Obama the federal government has spent over a trillion more each year than it takes in and federal spending has been 24% of GDP…..a level not seen since World War II. Shelby’s balanced budget amendment would provide an exception for a war that is declared by Congress or in a year where three fifths of both Houses of Congress agree to waive the balanced budget requirement.
Sen. Shelby’s Simplified, Manageable And Responsible Tax (SMART) Act would establish a flat income tax rate of 17 percent on all income. There would be personal exemptions of: $14,070 for a single person; $17,970 for a head of household; $28,140 for a married couple filing jointly; and $6,070 for each dependent. Those allowances would be indexed to the consumer price index in order to keep up with inflation. To encourage savings earnings from savings would not be included as taxable income.
The SMART Act would save taxpayers the long hours spent poring over IRS forms and the fees paid for professional tax assistance. Under the SMART Act, businesses would pay a 17 percent rate on net profits. The simplified tax code would close loopholes and allow businesses to redirect resources away from tax compliance and toward expanding their businesses.
The U.S. national debt has increased from $10.6 trillion at the start of President Obama’s first term to $16.4 trillion today. The annual budget deficit is nearly seven times the amount it was five years ago ($1.1 trillion in 2012 versus $161 billion in 2007).
Senator Shelby is the ranking Republican on the Senate Appropriations Committee.