Sec. 2. Congressional findings

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Congress finds the Federal income tax— retards economic growth and has reduced the standard of living of the American public; impedes the international competitiveness of United States industry; reduces savings and investment in the United States by taxing income multiple times; slows the capital formation necessary for real wages to steadily increase; lowers productivity; imposes unacceptable and unnecessary administrative and compliance costs on individual and business taxpayers; is unfair and inequitable; unnecessarily intrudes upon the privacy and civil rights of United States citizens; hides the true cost of government by embedding taxes in the costs of everything Americans buy; is not being complied with at satisfactory levels and therefore raises the tax burden on law abiding citizens; and impedes upward social mobility.

Congress finds further that the Social Security and Medicare payroll taxes and self-employment taxes— raise the cost of employment; destroy jobs and cause unemployment; and have a disproportionately adverse impact on lower income Americans. Congress finds further that the Federal estate and gift taxes— force family businesses and farms to be sold by the family to pay such taxes; discourage capital formation and entrepreneurship; foster the continued dominance of large enterprises over small family-owned companies and farms; and impose unacceptably high tax planning costs on small businesses and farms.

Congress finds further that a broad-based national sales tax on goods and services purchased for final consumption— is similar in many respects to the sales and use taxes in place in 45 of the 50 States; will promote savings and investment; will promote fairness; will promote economic growth; will raise the standard of living; will increase investment; will enhance productivity and international competitiveness; will reduce administrative burdens on the American taxpayer; will improve upward social mobility; and will respect the privacy interests and civil rights of taxpayers.

Congress further finds that— most of the practical experience administering sales taxes is found at the State governmental level; it is desirable to harmonize Federal and State collection and enforcement efforts to the maximum extent possible; it is sound tax administration policy to foster administration and collection of the Federal sales tax at the State level in return for a reasonable administration fee to the States; and businesses that must collect and remit taxes should receive reasonable compensation for the cost of doing so.

Congress further finds that the 16th amendment to the United States Constitution should be repealed.