(iii) a fair opportunity to do so. 
(10) MORE OPPORTUNITY FOR WAGE EARNERS 
AT LOWER INCOME LEVELS.— 
(A) REFUNDABLE CREDIT FOR EMPLOYEE 
PAYROLL TAX.—The amount of the payroll tax 
paid or withheld under the Code from an em-
ployee’s wages (and paid into the Social Secu-
rity and Hospital Insurance Trust Funds) is— 
(i) credited against the employee’s in-
come tax, and 
(ii) refunded to the employee to the 
extent in excess of the employee’s income 
tax. 
(B) NO EFFECT ON TRUST FUND OR BEN-
EFITS.—The income tax credit allowed for pay-
roll taxes deposited in the Social Security Trust 
Fund does not— 
(i) reduce the amount in such fund, or 
(ii) reduce the payment of any per-
son’s benefits from the fund. 
TITLE II—SIMPLIFIED USA TAX 
FOR INDIVIDUALS 
SEC. 201. SIMPLIFIED USA TAX FOR INDIVIDUALS. 
(a) IN GENERAL.—Chapter 1 of the Code is amended 
to read as follows:
‘‘CHAPTER 1—SIMPLIFIED USA TAX FOR 
INDIVIDUALS 
‘‘Subchapter A. Basic rules. 
‘‘Subchapter B. Roth IRA and other savings provisions. 
‘‘Subchapter C. Basis, business transactions, and nonrecognition transactions. 
‘‘Subchapter D. Rules for exclusions from gross income. 
‘‘Subchapter E. Rules relating to deductions. 
‘‘Subchapter F. Special business activities. 
‘‘Subchapter G. Accounting methods. 
‘‘Subchapter H. Nonresident aliens. 
‘‘Subchapter I. Trusts and estates. 
‘‘Subchapter J. Definitions and rules of application. 
‘‘Subchapter A—Basic Rules 
‘‘Sec. 1. Simplified USA tax for individuals. 
‘‘Sec. 2. Persons liable for the Simplified USA for individuals. 
‘‘Sec. 3. Gross income. 
‘‘Sec. 4. Exclusions from gross income. 
‘‘Sec. 5. Alimony and child support deductions. 
‘‘Sec. 6. USA deductions. 
‘‘Sec. 7. Homeowner deduction. 
‘‘Sec. 8. Education deduction. 
‘‘Sec. 9. Philanthropic transfer deduction. 
‘‘Sec. 10. Limitation on deductions. 
‘‘Sec. 15. Tax rates. 
‘‘Sec. 16. Kiddie tax. 
‘‘Sec. 17. Rules for filing status and rate tables. 
‘‘Sec. 20. USA tax credits. 
‘‘Sec. 21. Family tax credit. 
‘‘Sec. 22. Work tax credit. 
‘‘Sec. 23. Payroll tax credit. 
‘‘Sec. 24. Taxes-paid tax credit. 
‘‘Sec. 25. Indexing for inflation. 
‘‘SEC. 1. SIMPLIFIED USA TAX FOR INDIVIDUALS. 
‘‘(a) IMPOSITION OF TAX.—An income tax is imposed 
on each individual described in section 2. The income tax 
shall equal the amount determined by applying the tax 
schedules in section 15 to the taxable income of the tax-
payer for the taxable year and reducing the tax so deter-
mined by the USA tax credits for the taxable year.
‘‘(b) TAXABLE INCOME.—‘Taxable income’ means 
adjusted gross income, reduced by the USA deductions, 
including— 
‘‘(1) the homeowner deduction, 
‘‘(2) the education deduction, and 
‘‘(3) the philanthropic transfer deduction. 
‘‘(c) ADJUSTED GROSS INCOME.—‘Adjusted gross in-
come’ means gross income, reduced by— 
‘‘(1) the alimony and child support deductions, 
and 
‘‘(2) the qualified IRA deduction. 
‘‘(d) NAME.—The tax imposed by this chapter shall 
be known as the ‘Simplified USA Tax for Individuals’. 
‘‘SEC. 2. PERSONS LIABLE FOR THE SIMPLIFIED USA TAX 
FOR INDIVIDUALS. 
‘‘(a) INDIVIDUALS ONLY.—The Simplified USA Tax 
for Individuals shall apply only to individuals. 
‘‘(b) CITIZENS AND RESIDENT ALIENS.—The Sim-
plified USA Tax for Individuals shall apply to all citizens 
of the United States and to all resident aliens of the 
United States. Except as specifically provided in this chap-
ter, the Simplified USA Tax for Individuals shall not 
apply to nonresident aliens. 
‘‘(c) NONRESIDENT ALIENS.—For rules applicable to 
the compensation income of nonresident aliens, see sub-
chapter H (sections 131 and 132). For rules on the with-
holding of tax on nonresident aliens, see chapter 5 (sec-
tions 1441–1464). 
‘‘(d) TAXPAYER.—For purposes of this chapter, ‘tax-
payer’ means an individual, or, in the case of a joint re-
turn, the husband and the wife. 
‘‘SEC. 3. GROSS INCOME. 
‘‘(a) GENERAL DEFINITION.—Except as otherwise 
provided in this chapter, ‘gross income for the taxable 
year’ means all income from whatever source derived by 
a taxpayer during the taxable year, including (but not lim-
ited to) the following items: 
‘‘(1) Compensation for services, including (but 
not limited to)— 
‘‘(A) salaries, 
‘‘(B) wages, 
‘‘(C) commissions, 
‘‘(D) tips, and 
‘‘(E) distributions from business entities 
(as defined in section 171). 
‘‘(2) Fringe benefits (except as specifically ex-
cluded by section 4(a)), including (but not limited 
to)— 
‘‘(A) the cost of health, disability, life or 
other similar insurance paid by an employer if
the taxpayer is indirectly or directly the bene-
ficiary of the policy or has the right to name 
the beneficiary of the policy, 
‘‘(B) employer-paid parking (unless the 
employee uses the automobile parked in the 
space regularly on employer business), 
‘‘(C) employer-paid educational benefits, 
‘‘(D) employer-paid housing (other than 
housing provided for the convenience of the em-
ployer), 
‘‘(E) employer-paid meals (other than 
meals provided for the convenience of the em-
ployer or reimbursement for the reasonable cost 
of meals incurred on overnight travel), 
‘‘(F) amounts contributed by an employer 
on behalf of an employee to a group legal serv-
ices plan, and 
‘‘(G) dependent care assistance received 
from an employer. 
‘‘(3) Distributions from business entities (as de-
fined in section 171) constituting— 
‘‘(A) compensation for use of capital, in-
cluding interest, or 
‘‘(B) shares of profits (including divi-
dends).
‘‘(4) Interest not described in paragraph (3)(A). 
‘‘(5) Rents. 
‘‘(6) Royalties. 
‘‘(7) Alimony, child support, and separate 
maintenance payments. 
‘‘(8) Includible social security benefits. 
‘‘(9) Income from the discharge of indebted-
ness. 
‘‘(10) Gains on the sale or disposition of assets. 
‘‘(11) Amounts stolen or embezzled. 
‘‘(12) Distributions from retirement plans and 
annuities (other than USA Roth IRAs) to the extent 
not previously included as income, as determined in 
accordance with section 33. 
‘‘(13) Amounts received through health, acci-
dent or disability insurance to the extent that— 
‘‘(A) the cost of such insurance was paid 
by an employer and not included in the employ-
ee’s taxable income and 
‘‘(B) such amounts exceed the actual med-
ical expenses incurred and not paid or treated 
as paid with amounts otherwise excluded from 
income. 
‘‘(b) DEFINITIONS.—For purposes of subsection (a) 
and section 4—