resence of the highest tax burden in American history; taxes represent a larger share of the U.S. economy than ever before (Armey 2). After World War II, the average family sent only about three percent of its income to Washington. The same family today gives 24 percent of its income to the federal tax collector (Mitchell 1, 9). Once state and local taxes are added to the federal take, taxes make up the biggest slice of the average family’s budget. As Daniel Mitchell of the Heritage Foundation shows in Figure 1, the typical American family now pays more of its budget in taxes than it spends on food, clothing, transportation and shelter combined (Mitchell 1, 10). Policy makers have introduced a solution to the staggering proportion of taxes that Americans spend. The flat tax, based on an idea developed by Professors Robert Hall and Alvin Rabushka of Stanford University to create a fair, simple, and pro-growth tax system (Mitchell 1, 11). There are four basic criteria that make up a flat tax. First is a single low rate on taxable income, the baseline for taxable income would be raised to a certain amount dictated by a personal exemption. Second is simplicity, all Americans would fill out the same postcard-sized form to pay their taxes. Third is the reduction or elimination of deductions, credits, and exemptions, depending on the different proposals. Last is the elimination of double taxation, the government will no longer be able to tax income saved or invested (Mitchell 1, 11). These four pillars of the flat tax make the proposed plan very appealing to many Americans, each proposal uses these pillars to try and create the most efficient flat tax.There are five flat tax proposals that have been proposed for legislation. The five flat tax proposals have been designed by: Rep Richard Armey (R-TX) and Sen. Richard Shelby (R-AL); Sen. Arlen Specter (R-PA); Steve Forbes; Sen. Phil Gramm; and Pat Buchanan.The Armey/Shelby flat tax,...
