COLUMN: Flat tax system would make April 15 simple, fair, easy
The average American family pays almost 24 percent of its income to the federal government each year in taxes, up from a mere 3 percent after World War II. Not only is the United States tax code the most complex creation in the history of mankind, but it has become the primary method by which bureaucrats in Washington gain political power, redistribute wealth, manipulate how Americans use their money and reward special interest groups. Steve Forbes describes the current system as an "anti-growth, anti-family, legalized cesspool of corruption." He is right: It's time to consider dumping the current system.
The prevailing sentiment across America is that major tax reform must happen soon. The current system is extremely complex and penalizes the successful who get pushed into punitive tax brackets as a reward for their hard work.
The IRS code also has too many targeted tax credits and exemptions, which is nothing more than Washington's attempt to control the behavior and consumption patterns of the taxpayers.
It is time for a new system, one that is fair, simple, devoid of social engineering, and achieves the one objective a tax system should have: to raise sufficient revenues to fund the federal government.
The Armey-Shelby flat tax proposal would replace the gargantuan IRS code with a simple, fair, single-rate system. Taxpayers would pay a 17 percent flat rate after subtracting allowances of $13,100 for a single person, $17,200 for a single head of household or $26,200 for a married couple, plus $5,300 for each dependent. A family of four earning $36,800 would pay no federal income tax.
The first and most obvious benefit of a flat tax is that it is simple. Right now, taxpayers spend 5.4 billion hours and $200 billion each year to pay their taxes. The flat tax would be filled out on a postcard-sized form and would take about 10 minutes to calculate.
Another benefit of the flat tax is that it is fair. The current tax system has been manipulated by Washington bureaucrats to create an element of class envy in our country.
Poor and middle class taxpayers believe the system to be rigged in favor of the rich. The rich feel as if they are being punished for their success with punitive tax rates. A flat tax would treat every taxpayer equally, eliminating class envy inherent in the current system.
Opponents of the flat tax also claim that having one marginal rate is unfair to the poor because the rich would not pay "their fair share."
However, once deductions are factored in, the "flat" tax actually produces a result in which the real rate (total tax over total income) is graduated. The rich pay a higher real percentage of their income, consistent with all notions of fairness.
One of the greatest benefits of the Armey-Shelby flat tax is the effects it would have on Washington politics and special interest groups. There are currently over 12,500 registered special interests in the capital, and most of them are looking for tax code favors.
Members of the House Ways and Means and the Senate Finance committees average 30 percent more in contributions than other members of the legislature. It pays to write tax laws -- in more than one way.
Our current tax system has got to go. It's too complex, unfair, and has evolved into nothing more than a tool of the establishment to control our lives and get political favors from special interests. The flat tax would solve these problems and, along with a balanced budget, would encourage economic growth and fully fund the government while giving tax relief to all Americans.
The flat tax is an idea whose time has come. Will anybody in Washington have the courage to make this tough decision? Only time will tell.
Allen Lewis is co-chairman of Rice Republicans and a Lovett College senior.
This item appeared in the Opinion section of the February 7, 1997 issue.
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