is opposition to the current tax system, and why major reforms are being proposed. Tax cuts and changes to tax policy are in fact key programs of the two presidential candidates, Al Gore and George W. Bush. Three main views exist about tax reform. The two major proposals at this time are a flat-rate income tax without deductions or exemptions, and a national sales or value-added tax. In addition to these new approaches, some factions suggest that an overhaul of the tax code is not necessary, but that small reforms are required. The reform that would be most beneficial to the Untied States as a whole would be to revamp the personal income tax system that we have now and replace it with a national sales tax.The first proposal for tax reform, the flat-rate income tax, would supposedly make the tax code simpler by eliminating the graduated rate of our current system. It would also eliminate all deductions and exemptions. The graduated income tax code that is our current system, which has rates that increase as income rises, would be leveled to a single rate for all income levels. An article in Nations Business states that These high individual tax rates apply to the income of many small businesses, including sole proprietorships, partnerships, corporations, and limited-liability companies. High marginal tax rates create a disincentive for small business owners to earn additional income since they know a greater percent of their incomes will go to the federal government. In light of this statement, the graduated rates of the modern tax code hurt many businesses by taxing them at higher rates as they earn more profit. The principle of all business endeavors is to earn a profit, and the flat-rate income tax would provide an incentive to American businesses. Economic growth would therefore be spurred if the path to greater income was not hindered by high tax rates. Also as part of the flat-rate income tax plan, the tax rate is the ...
