a flat tax, a proportional one, income is taxed once and never again. (Henderson 57)According to the Armey flat tax plan, taxes would be simple enough to file on a postcard sized return. However, for most Americans, paying taxes, though unpleasant, is not actually very complicated. More than 70 percent use the standard deduction. Twenty million filers use 1040 EZ forms that are almost postcard-like; this year, taxes can be files via a ten minute phone call. (Miller 6)Some provisions of the flat tax would make the lives of most ordinary wage earners far more difficult. Employers would no longer be allowed to deduct from their gross revenues the cost of group health insurance and most other fringe benefits they provide for their employees. Eliminating deductions for such non-cash compensation would raise the cost of doing business and provide many employers, who are already inclined to trim benefits, with an incentive to pare them back further or end them entirely. Most employers may be willing to pay employees additional wages to compensate them for lost fringe benefits they could no longer deduct. But employees would have to pay taxes on that income and spend their own money to buy the health insurance or other protection the employer once provided. (Consumer Reports 9)The Armey plan invites abuse. The flat tax doubles the exemption for each dependent, but the postcard does not leave space to list dependents. Seven million bogus dependents—dogs, cats, etc.—vanished when the IRS began requiring names and Social Security numbers in 1988. To prevent their return, the postcard must expand. (McNamara 135)The self-employed would face more paperwork. Now, a small business owner reports on his own personal tax return. To claim the flat tax’s personal exemptions, he would have to pay himself a salary, file quarterly and annual wage reports, and fill out two tax returns. The business tax retains some complex rules, too. Under th...
