The current tax system is too complex, it penalizes productive work, and it gives unfair advantages to people with political influence. Our reforms make the system simple and fair while encouraging people to save and invest.
A truly flat tax
We replace today’s complex mosaic of tax systems and rates with a single rate for all. The current payroll tax on workers and employers funding Medicare and Social Security is folded in. And we cap the government's take to no more than 18.5 percent of the economy-the historical average.
A truly simple tax system
Under the Heritage plan, you're taxed only once and only on income that you spend on consumer goods and services. Money you save is not taxed until you spend it, like a giant IRA but without the complicated rules.
Protection for working households
No more payroll tax (for Social Security and Medicare) that hits low-income workers hardest. A health insurance tax credit provides tax relief for health care costs. And the Earned Income Tax Credit is preserved to help families with low incomes.
Security for low-income seniors
Our plan means, unlike today where seniors with as little as $15,000 in income have their benefits taxed, low-income retirees pay no taxes on Social Security benefits. Also, any senior who works beyond retirement age pays no taxes on the first $10,000 in earnings.
Business taxes that free up investment and fuel growth
Our plan substantially reduces barriers to business investment and makes businesses more competitive. Businesses are taxed only on domestic income. Our plan repeals the estate tax so family businesses can pass from one generation to the next.