WASHINGTON _ Two senators proposed a sweeping tax overhaul Thursday that would create a new tax on business, eliminate the current corporate tax and cut income taxes for many individuals.
Sens. David Boren, D-Okla., and John Danforth, R-Mo., both members of the Senate Finance Committee, said the consumption tax on business would increase investment, boost savings and create jobs. It would not increase the government's overall tax take, they said.
"This is a scrapping of a very complicated part of the Internal Revenue Code and replacing it with something different," Danforth said. "It is a major step toward simplification. It will oil up the Rust Belt."
The bill would eliminate the entire corporate income tax, now paid by about 24 million businesses. That tax is inefficient, Danforth said, bringing in just $100 in revenue for every $390 in compliance costs for many small businesses.
In its place, a new "business activities tax" would be imposed. …