Tax Simplification Act

Tax Simplification Act - Title I: Simplification of Individual Income Tax - Amends the Internal Revenue Code to repeal the income tax tables. Provides for a flat income tax rate of 15 percent for all individuals, estates, and trusts.

Redefines "adjusted gross income" to eliminate the deductions from gross income for the following: (1) long-term capital gains; (2) moving expenses; (3) retirement savings; and (4) two-earner married couples.

Defines "allowable itemized deductions" as any deduction attributable to: (1) expenses for the production of income; (2) contributions to a church; or (3) alimony or separate maintenance payments.

Repeals the deductions for: (1) medical and dental expenses; (2) interest, taxes, and depreciation of cooperative housing; (3) moving expenses; (4) retirement savings; (5) adoption expenses; (6) two-earner married couples; and (7) capital gains.

Repeals the tax exclusion of: (1) certain death benefits; (2) gifts and inheritances; (3) income from discharge of indebtedness; (4) recovery of bad debts, prior taxes, and delinquency amounts; (5) income of States and municipalities; and (6) certain contributions to capital of a corporation.

Requires that two-fifteenths of the revenues issued by this Act shall be used exclusively for retirement of outstanding obligations of the United States.

Title II: Reduction of Estate and Gift Tax Rates - Repeals the estate and gift tax tables. Provides for a flat tax rate of 14 percent for all estates and gifts. Decreases from $192,800 to $84,000 the unified credit against the estate and gift taxes, after 1986. Provides for a phase-in of such amount in taxable years 1983 through 1986.