gh the current system costs the economy $1.39” (Armey, Shelby).A typical American family pays more in taxes then they spend on shelter, clothing, food and transportation combined. Taxes now represent a larger share of the U.S. economy than ever before. “The American people are beleaguered by the highest tax burden in American history” (Armey, Shelby). During the last few decades, the tax burden has risen dramatically on families with children. High taxes have implemented unparalleled growth in government. With the exception of Japan and the United States, the U.S. public sector now is larger than the entire economy of any country in the world.The Flat Tax SolutionThe Armey-Shelby flat tax (H.R. 1040) rejects the entire income tax code and replaces it with a flat-rate income tax that treats all Americans equally. The flat rate would not be in full effect until its third year, with a 20 percent rate for the first two years and a 17 percent rate for following years. According to the advocates, this plan would break down the tax code, promote economic opportunity, and reinstate fairness and integrity to the tax system. Individuals and businesses would pay the same rate. The only income not subject to tax would be a generous personal exemption that every American would receive. This plan eliminates all deductions and credits and there are no loopholes. It is just a simple tax system that would supposedly treat everyone equally.What Is a Flat Tax “The Armey-Shelby flat tax plan, the Freedom and Fairness Restoration Act, scraps the entire tax code and replaces it with a flat-rate income tax that treats every taxpayer equally. The plan would clarify the tax code, promote job and income growth, and restore fairness and integrity to the tax system” (The Doctor). The new system would be based on three principals. “1. Tax all income with no deductions except a generous allowance based on family size. To...
