NYSSCPA has developed and introduced for review the Simplified, Exact, Transparent (SET) Tax that  "allows taxpayers to see what taxes they owe, why they owe tax, where their money is going and how deductions directly benefit them," NYSSCPA said in a statement.

The proposal "offers a greatly simplified approach to income tax reform that not only eliminates the AMT and other unnecessary complexity of the current tax system," said NYSSCPA, but "also generates revenue that will make up for the loss of revenue that will occur with the elimination of the AMT. This projected loss of revenue has been a major stumbling block in other efforts to eliminate the AMT."

The society's proposal comes on the heels of a proposed a $1 trillion tax overhaul that would eliminate the AMT.

The alternative minimum tax brought in $18 billion in tax revenue for the government last year, said NYSSCPA, and left as is, the tax is projected to affect 30 million taxpayers by 2010.

The proposed SET Tax translates all the provisions of the current Internal Revenue Code into a single formula:

Income – Congressionally defined subtractions (deductions) x rate = Tax

The SET Tax would tax all incomes over a threshold established by political leaders, reduced by government-approved subtractions (such as mortgage interest or childcare), at an economically appropriate and socially acceptable single rate.

"We cannot predict the actual rate, but a 35 percent rate would keep the existing tax bills for all currently compliant taxpayers. The SET Tax starts with a higher rate and narrows the base transparently through subtractions," said NYSSCPA President David A. Lifson.

The tax uses a single tax rate on all gross income and then allows straightforward subtractions defined by Congress, such as mortgage interest, state taxes and charitable contributions and a portion of long-term capital gains. Taxpayers will see how their subtractions lower their tax base and what benefits they are receiving from the government (such as a mortgage interest subtraction).

"The SET Tax is a transparent way to see the impact of social and tax policy decisions made by Congress. These decisions are currently often opaquely buried in the tax system," Lifson said.

NYSSCPA estimates a 90 percent tax compliance rate, as opposed to the current 85 percent compliance rate. The SET Tax proposes that any income earner should file a tax return, even if no tax is due.

Addressing those who would call the SET Tax a flat tax, NYSSCPA said: "Undressed, the SET Tax is a flat tax because it has one rate, but it's not the flat tax. Flat tax proponents state that a tax system with a single, lower rate is better. More importantly, the flat tax is often perceived as a way to lower taxes on the wealthy. The SET Tax proposal does not promise or promote redistribution of the tax burden; it only makes it obvious if it happens."