The Flat Tax

The Sixteenth Amendment of the U.S. Constitution states, “the Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without appointment among the several states, and without regard to any census or enumeration.” (Mallor et al, 1280). The ratification of the Sixteenth Amendment, the Revenue Act of 1913 is the first tax Form 1040 which was due on March 1, 1914 is now a part of every working American . The complexity of the U.S. Tax Code is a familiar routine for working individuals, accountants, and attorneys on April 15 of every year.

The Sixteenth Amendment was introduced to the people as a “ simple to compute, fair to all, and would never apply to any part of a person income needed to sustain a decent standard of living…..it was understood only very large incomes from investments would be taxed, not the wages of working man.” (Griffin, 10). However, income tax is now a “major source of revenue for the Federal government…. the collections of income tax from individuals and corporations amount to 53% of the total receipts.” (Hoffman, 1-4).

According to author Deroy Murdock, it is estimated that “Americans will pay accountants and attorneys $140-$200 billion, or $700 for every man, woman and child to do their taxes, and examine through the 46,000- page of U.S. tax Code, and spend 5.4 billion hours a year doing income tax.” (Murdock, 1). For many years, the U.S. government has tried to simplify the tax code; however, it seems to be more complicated each year. In recent years, Congressman Dick Armey and Senator Richard Shelby have tried to introduce a new tax reform called the H.R.1040-the Armey-Shelby Flat Tax, which is also known as the “flat tax rate.” This is the most vocal and notable proposal to date. The proposal calls for a “flat tax rate of 17% apply to the annual income from all wages, salaries, and pensions after deduction of personal allowance.” (Tax Reform, Flat Tax, 1).

In addition, there will also be four categories of allowances:

1. $ 23,000 for married filing jointly

2. $ 15,000 for single head of household

3. $ 11,000 for single

4. $ 5,000 for dependent child

(Tax Reform: Flat Tax, 2)

The Armey Plan would also call for the elimination of “the current deductions of $ 3,000 child credits,