The flat tax is a proposal introduced my Congressman Dick Armey and Senator Richard Shelby, which is a tax that they want to replace the current income tax system with. This paper explains the current tax system and its complexity, which is why a new tax system should be created. It then goes into the flat tax solution and explains what the flat tax is and how it would treat Americans equally according to its creators (Armey and Shelby) and its advocates. How the flat tax would affect both individuals and businesses is addressed and how the tax payments would be distributed among different income levels. After explaining about the flat tax and how it will treat everyone equally, the flaws of the flat tax are exposed and the truth about the flat tax is told.Current Tax SystemThe current income tax system is very complex. It is so complex; that the IRS publishes 480 tax forms then they publish another 280 forms that explains the 480 forms. “The IRS sends out eight billion pages of forms and instructions each year, which, if laid end to end, would circle the earth 28 times. Nearly 300,000 trees are cut down each year to produce the paper on which IRS forms and instructions are printed” (Armey, Shelby). The main reason the tax code is so complex is the proliferation of deductions, credits and other special preferences in the tax law. Taxpayers with similar incomes can pay vastly different amounts in taxes because of these loopholes. This uneven treatment of taxpayers is fundamentally unfair to those who do not know the loopholes and is at odds with the American value of equality under the law. “According to a study by an economist with the Congressional Research Service, the corporate income tax costs the economy more in lost production than it raises in revenue for the Treasury. Dale Jorgenson, the chairman of the Economics Department at Harvard University, found that each extra dollar the government raises throu...
