‘‘PART VIII—THE FLAT TAX 
‘‘Sec. 60. Irrevocable election to be subject to flat tax. 
‘‘Sec. 60A. Tax imposed on individuals. 
‘‘Sec. 60B. Tax imposed on business activities. 
‘‘Sec. 60C. Tax on noncash compensation provided to employees not engaged in 
business activity. 
‘‘SEC. 60. IRREVOCABLE ELECTION TO BE SUBJECT TO 
FLAT TAX. 
‘‘(a) INDIVIDUAL.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), in lieu of the tax imposed by sections 1 
(relating to tax imposed) and 55 (relating to alter-
native minimum tax imposed), under regulations 
prescribed by the Secretary, an individual may make 
an irrevocable election to be subject to the tax im-
posed by this part. 
‘‘(2) INNOCENT SPOUSE EXCEPTION.—An indi-
vidual who has made an election under paragraph 
(1) and who subsequently obtains relief of liability 
for tax under section 6015(b) may, not later than 1 
year after the date such relief is granted, revoke the 
election made under paragraph (1). 
‘‘(b) PERSON ENGAGED IN BUSINESS ACTIVITY.—In 
lieu of the tax imposed by sections 11 (relating to tax im-
posed) and 55 (relating to alternative minimum tax im-
posed), under regulations prescribed by the Secretary, a 
person engaged in business activity may make an irrev-
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ocable election to be subject to the tax imposed by this 
part. 
‘‘(c) DISALLOWANCE OF CREDITS.—No credit shall 
be allowed under this chapter for any taxable year to any 
person with respect to whom an election under subsection 
(a) or (b) is in effect. 
‘‘SEC. 60A. TAX IMPOSED ON INDIVIDUALS. 
‘‘(a) IN GENERAL.—There is hereby imposed on the 
taxable income of every individual who makes an election 
to be subject to this part a tax equal to— 
‘‘(1) 19 percent of the taxable income of such 
individual for such taxable year in the case of the 
first 2 taxable years of the individual beginning with 
the taxable year for which the election is made, and 
‘‘(2) 17 percent of the taxable income of such 
individual for such taxable year in the case of all 
taxable years subsequent to the taxable years de-
scribed in paragraph (1). 
‘‘(b) TAXABLE INCOME.—For purposes of this part, 
the term ‘taxable income’ means the excess of— 
‘‘(1) the sum of— 
‘‘(A) wages (as defined in section 3121(a) 
without regard to paragraph (1) thereof) which 
are paid in cash and which are received during 
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the taxable year for services performed in the 
United States, 
‘‘(B) retirement distributions which are in-
cludible in gross income for such taxable year, 
plus 
‘‘(C) amounts received under any law of 
the United States or of any State which is in 
the nature of unemployment compensation, over 
‘‘(2) the standard deduction. 
‘‘(c) STANDARD DEDUCTION.—For purposes of this 
part— 
‘‘(1) IN GENERAL.—The term ‘standard deduc-
tion’ means the sum of— 
‘‘(A) the basic standard deduction, plus 
‘‘(B) the additional standard deduction. 
‘‘(2) BASIC STANDARD DEDUCTION.—For pur-
poses of paragraph (1), the basic standard deduction 
is— 
‘‘(A) $32,496 in the case of— 
‘‘(i) a joint return, or 
‘‘(ii) a surviving spouse (as defined in 
section 2(a)), 
‘‘(B) $20,739 in the case of a head of 
household (as defined in section 2(b)), and 
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‘‘(C) $16,248 in the case of an indi-
vidual— 
‘‘(i) who is not married and who is 
not a surviving spouse or head of house-
hold, or 
‘‘(ii) who is a married individual filing 
a separate return. 
‘‘(3) ADDITIONAL STANDARD DEDUCTION.—For 
purposes of paragraph (1), the additional standard 
deduction is $6,998 for each dependent (as defined 
in section 152) who is a qualifying child (as defined 
in section 152(c)(1)) for the taxable year and who 
is not required to file a return for such taxable year. 
‘‘(d) RETIREMENT DISTRIBUTIONS.—For purposes 
of this section, the term ‘retirement distribution’ means 
any distribution from— 
‘‘(1) a plan described in section 401(a) which 
includes a trust exempt from tax under section 
501(a), 
‘‘(2) an annuity plan described in section 
403(a), 
‘‘(3) an annuity contract described in section 
403(b), 
‘‘(4) an individual retirement account described 
in section 408(a), 
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‘‘(5) an individual retirement annuity described 
in section 408(b), 
‘‘(6) an eligible deferred compensation plan (as 
defined in section 457), 
‘‘(7) a governmental plan (as defined in section 
414(d)), or 
‘‘(8) a trust described in section 501(c)(18). 
Such term includes any plan, contract, account, annuity, 
or trust which, at any time, has been determined by the 
Secretary to be such a plan, contract, account, annuity, 
or trust. 
‘‘(e) INCOME OF CERTAIN CHILDREN.—For purposes 
of this part— 
‘‘(1) an individual’s taxable income shall include 
the taxable income of each dependent child of such 
individual who has not attained age 14 as of the 
close of such taxable year, and 
‘‘(2) such dependent child shall have no liability 
for tax imposed by this section with respect to such 
income and shall not be required to file a return for 
such taxable year. 
‘‘(f) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any taxable 
year beginning in a calendar year after 2018, each 
dollar amount contained in subsection (c) shall be 
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increased by an amount determined by the Secretary 
to be equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment for such 
calendar year. 
‘‘(2) COST-OF-LIVING ADJUSTMENT.—For pur-
poses of paragraph (1), the cost-of-living adjustment 
for any calendar year is the percentage (if any) by 
which— 
‘‘(A) the CPI for the preceding calendar 
year, exceeds 
‘‘(B) the CPI for the calendar year 2017. 
‘‘(3) CPI FOR ANY CALENDAR YEAR.—For pur-
poses of paragraph (2), the CPI for any calendar 
year is the average of the Consumer Price Index as 
of the close of the 12-month period ending on Au-
gust 31 of such calendar year. 
‘‘(4) CONSUMER PRICE INDEX.—For purposes 
of paragraph (3), the term ‘Consumer Price Index’ 
means the last Consumer Price Index for all urban 
consumers published by the Department of Labor. 
For purposes of the preceding sentence, the revision 
of the Consumer Price Index which is most con-
sistent with the Consumer Price Index for calendar 
year 1986 shall be used. 
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