Abstract
This paper discusses introduction a flat tax reform in America's federal income tax law. To analyze the flat tax, the current income tax and the proposed flat tax structure is compared as well as a definition of progressive taxation. General points for and against a flat tax follow. A detailed flat tax piece of legislation prepared by United States Representative Dick Armey and United States Senator Richard Shelby are summarized and used as an example of a specific implementation of a flat tax. Finally the paper shows why a flat tax is more desirable than the current federal tax structure.

Outline:
Introduction
Flat Income Tax
Current Income Tax
Armey-Shelby Proposed Flat Income Tax
Tax Types
Progressive Tax
Definition
Example: Federal Income Tax Structure
Regressive Tax
Definition
Example: Social Security Tax
Current Income Tax
Problems
Complexity
Administration Cost
Increasing Tax Burden
Special Interest Lobbying
Flat Income Tax
"Ideal" Flat Tax
Armey-Shelby Tax Proposal
One Tax Rate
Simple Tax Form
No Tax on Savings
Elimination of Double Taxation
Zero Tax Bracket
Other Benefits
Other Definitions of Taxes
Consumption Tax
Sales Tax
Value-added Tax (VAT)
Wage Tax
Income Tax
Timing of Tax Collection
Best Choice - Flat Income Tax
Current Problem Solution
Ease of Administration
Encourage Savings and Investment

From the Paper
"There are two main reasons for mentioning that income is taxed "one time." Currently dividends paid to company stockholders are taxed both as profits for the company and dividend income for the individual who is paid the dividend. To eliminate this double taxation of dividends the company will pay corporate income taxes on its profits and the individual will not be liable for any taxes on the dividends he receives. A second reason is the elimination of taxing savings twice. If an individual puts a dollar from his paycheck that he has already paid income tax on in the bank, then any earnings on the savings is again taxed. Both of these situations inhibit savings and investment taking dollars out of the economy and recycling them through the federal government."

Tags:Dick, Armey, Richard, Shelby, progressive

Abstract
An economic approach to why America should move towards a flat tax or a VAT tax as the Europeans use, as opposed to the restrictive and damaging stepped tax used today.

From the Paper
"The way in which our tax system is set up leaves the majority of us wondering what is going on. To put it concisely I must quote Republican Dick Armey in saying "Our current tax system is broken. It is complex; unfair; inhibits savings, investments and job creation; imposes a heavy burden on families; and undermines the integrity of the democratic process. It cannot be repaired by any tinkering or fine tuning. It must be completely repealed and replaced". The U.S. tax code, as Armey says, has many problems and negative implications on our economy. Our Tax system now has so many loopholes and deductions that it actually brings up the marginal rate of taxation for everyone. Savings is discouraged by double taxation, once on your money earned from working, before investment, then again after benefiting from an investment. All of these issues can be cleared up under a flat tax."

Tags:act, armey, dick, fairness, freedom, restoration, stepped, vat