(3) SAVING AND INVESTMENT.—The Simplified 
USA Tax allows people to save and businesses to in-
vest as follows: 
(A) FAIR OPPORTUNITY FOR PEOPLE TO 
SAVE.— 
(i) OPTIONAL ELIMINATION OF DOU-
BLE TAXATION.—When an individual earns 
income and is taxed on that income, the 
individual can save that income in a Roth 
IRA and not pay income taxes on the in-
vestment earnings. 
(ii) DEDUCTIBLE
AND
EXCLUDABLE 
SAVINGS.—The Simplified USA Tax con-
tinues provisions of present law that 
allow— 
(I) lower income individuals and 
certain others to make deductible con-
tributions to individual retirement ac-
counts, and 
(II) encourage employer spon-
sored savings and retirement plans 
that defer taxation of income through 
use of 401(k) plans and other quali-
fied retirement plans.
(B) FAIR OPPORTUNITY FOR BUSINESSES 
TO INVEST.— 
(i) NO PREPAYMENT OF TAX.—When 
a business invests in plant and equip-
ment— 
(I) a deduction is allowed for the 
cost, and 
(II) tax is deferred. 
(ii) TAX ON EARNINGS AND RECOVERY 
OF COST.—When recovered out of business 
revenues, both the cost of the investment 
and the earnings on the investment are in-
cluded in gross profit subject to tax. 
(iii) EXPENSING.—The deduction for 
investment is the equivalent of allowing the 
cost of plant and equipment to be expensed 
instead of depreciated. 
(4) FAIR OPPORTUNITY TO COMPETE IN THE 
GLOBAL MARKETPLACE.—The Simplified USA Tax 
serves the strategic interests of the United States in 
international markets as follows: 
(A) BORDER ADJUSTABLE TAX.— 
(i) 
AMERICAN-MADE
EXPORTS.— 
Goods and services produced in the United
States can be sold into world markets free 
of tax. 
(ii) FOREIGN-MADE IMPORTS.—Goods 
and services imported into the United 
States bear a fair and proportionate share 
of the tax burden in the United States. 
(iii) LEVELING THE INTERNATIONAL 
PLAYING FIELD.—Border adjustments for 
exports and imports are consistent with 
international standards and practice. 
(5) A SIMPLE AND UNDERSTANDABLE TAX.— 
The Simplified USA Tax for individuals— 
(A) is written in a simple, understandable 
form, 
(B) contains only a few exemptions, deduc-
tions, and credits, and can be reported on a tax 
return only a small fraction the size of Form 
1040. 
(6) A NONINTRUSIVE, EVENHANDED TAX.— 
(A) TAXPAYERS ARE IN CONTROL.—When 
the rules are few and clear, taxpayers can cal-
culate their own tax correctly and file their own 
returns without fear of mistake or of getting 
caught up in an argument with the IRS.
(B) LIMITED ROLE FOR IRS.—When the 
rules are few and clear, the IRS does not have 
the broad interpretive power that puts tax-
payers at risk of being treated unfairly and un-
evenly. 
(C) 
RESTORING
VOLUNTARY
COMPLI-
ANCE.—When the rules are few and clear, the 
IRS can concentrate on helping taxpayers vol-
untarily pay their correct share of tax revenues 
for public use and benefit under a tax system 
that is understood and respected. 
(7) MAINTAINING TAX PROGRESSIVITY FOR IN-
DIVIDUALS.— 
(A) GRADUATED TAX.—Like the tax im-
posed by section 1 of the current Code, the 
Simplified USA Tax for individuals is a grad-
uated tax. 
(B) FAMILY
AND
WORK
CREDITS.—The 
Simplified USA Tax recognizes that every fam-
ily’s budget includes necessities. The Simplified 
USA Tax provides a family credit for all fami-
lies as well as a refundable work credit, quali-
fying families to maintain a basic standard of 
living.
(8) BUSINESSES AND INDIVIDUAL SHARE THE 
TAX BURDEN.— 
(A) BUSINESS
PORTION
OF
TAX
BUR-
DEN.—Corporations and other businesses pay 
about the same portion of the total tax as 
under the current Code. 
(B) INDIVIDUAL
PORTION
OF
TAX
BUR-
DEN.—Individuals pay about the same portion 
of the total tax as under the current Code. 
(9) EMPHASIZING
PERSONAL
INDEPENDENCE 
AND RESPONSIBILITY.— 
(A) REINFORCING A CULTURE OF WORK 
AND THRIFT.—Instead of being solely a calcula-
tion of how much they must pay to the govern-
ment, the Simplified USA Tax converts the in-
come tax into an annual calculation of how 
much people produce and contribute to the 
economy. 
(B) GREATER
CONTROL
AND
RESPONSI-
BILITY.—Because people are not double taxed 
on their saving, they have— 
(i) more control over their own income 
and taxes, 
(ii) a greater ability to plan and pro-
vide for their own future, and