Flat Tax

The flat tax is a proposal to replace the current federal income tax code with a simple one-rate tax on all earned income. Instead of a system of progressive rates in which the percentage of tax taken increases as income rises, all income would be taxed at the same rate, 17% in some proposals, and the only deduction allowed would be a personal deduction.

Proponents of the flat tax cite several advantages over the present system. Complexity would be reduced, making it possible for all individuals to fill out their own tax forms. The present tax code fills more than 60,000 pages, and most income tax returns are prepared by professionals. Complying with the tax code costs as much as $194 billion a year according to ...