The Flat Tax
The United States tax system is in complete disarray. Republicans and Democrats agree that the current tax code is complex, unfair, and costly. The income tax system is so complex; the IRS publishes 480 tax forms and 280 forms to explain the 480 forms (Armey 1). The main reason the tax system is so complex is because of the special preferences such as deductions and tax credits. Complexity in the current tax system forces Americans to spend 5.4 billion hours complying with the tax code, which is more time than it takes to manufacture every car, truck and van produced in the United States (Armey 1). Time is not the only thing that is lost with the current tax system; Americans also lose great deal of money complying with the tax code. Resources that are currently wasted on record keeping, filing forms, learning the tax code, litigation, and tax avoidance. The cost of complying with the current tax code totals about $200 billion annually, or $700 for every man, woman, and child in America (Armey 1). The overwhelming consensus that the current tax system is inadequate has ignited the search for tax reform. There are numerous proposals for tax reform; one particular proposal brought forth by various conservatives is the idea
http://flattax.house.gov/proposal/flat-sum.asp The Armey/Shelby flat tax, based on the Hall/Rabushka flat tax would replace the current personal and corporate income tax with a simple 17 percent tax on all income. With the exception of a generous family allowance ($33,300 for a family of four), all labor income is taxed at the individual level. Taxes on business income (such as interest, dividends, capital gains, and rent) are withheld and paid at the business level. Both businesses and individuals would fill out simple post card sized returns (Mitchell 3, 3). Using the same model as the Armey/Shelby flat tax, Senator Arlen Specter, purposes a slightly higher rate of 20 percent and lower personal allowance in order to maintain limited deductions for charitable contributions and the full deduction for home mortgage interest (Mitchell 2, 3). Steve Forbes proposal is much the same as the Armey/Shelby proposal. Forbes uses the same 17 percent as the Armey/Shelby plan, but increases the family of four allowance to $36,000 (Mitchell 3, 3). In conclusion, as pointed out early in this paper there is a strong base for tax reform. The flat tax could quite possibly be the missing link in tax reform. Although opponents offer good arguments against the flat tax, with some modifications the flat tax could be implemented in the American tax system. The current flat tax proposals could be modified to insure security for businesses and the poor. With insurance for businesses and the poor more people would be likely to get behind a flat tax or some type of proposal that resembles a flat tax. All proposals will have their opponents, but it is up to the people to weigh the pros and cons and decide what would work the best, because obviously are current system is not working for the benefit of its people.
Some common words found in the essay are:
Tax Foundation, Treasury Department, Pat Buchanan, Rep Armey's, America Armey, Stanford University, Buchanan Armey/Shelby, flat tax, Republicans Democrats, Rep Armey, Committee Taxation, 1999 available, flat tax proposals, tax proposals, tax reform, tax system, mitchell 1, income tax, on-line internet, current tax, tax code, 1996 on-line internet, sept 1999 available, 21 sept 1999, internet 21 sept,
Approximate Word count = 2512
Approximate Pages = 10 (250 words per page double spaced)
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