WASHINGTON — The American tax system needs major changes now and a complete overhaul in the long term, Sen. Orrin G. Hatch told an audience on the presidential campaign trail Friday in New Hampshire.
Hatch (R-Utah) said that if he is elected president, he will appoint a commission on his second day in office that will propose the long-term changes, including eliminating the Internal Revenue Service and replacing the progressive income tax with a national sales tax.
That same day, he also would send Congress interim legislation to:
* Double the personal exemption.
* Allow a deduction for Social Security taxes paid.
* Eliminate capital-gains taxes and exempt the first $5,000 in dividend income, or $10,000 in income for couples filing jointly.
* Eliminate the "marriage penalty" and estate and gift taxes.
"If we merely tinker with the tax code, the changes can be easily reversed by a subsequent administration," Hatch told about 25 people attending a breakfast meeting of the Nashua, N.H., Chamber of Commerce.