According to U.S. Representative Dick Armey (R., Texas), the IRS sends out 300,000 trees worth of forms and instructions every year. Eight billion pages. Twenty-eight times around the world if laid end-to-end. Perhaps more amazing, are figures compiled by the Congressman showing that we spend 5.4 billion hours a year doing our income tax at a total cost of $200 billion, or $700 for every man, woman and child in America.
But, if Congressman Armey ever sees his plan prevail, filing your annual individual income tax return will be a lot easier, faster, and, for the government anyway, cheaper. The plan is called "Flat Tax" and while it's been around for years, these two conservative Congressmen have pushed it farther up the "Hill" and won it more bi-partisan support than ever before.
Ironically labeled "H.R.1040", the Armey-Shelby Flat Tax would toss out the current tax code in favor of a system that would treat all Americans the same regardless of their income. According to Armey and Shelby, the flat tax would simplify the tax system, boost the economy, and make the tax system absolutely fair.
How the Flat Tax Would Work
The flat tax rule simply says this: Everyone -- you, me, even Bill Gates -- would pay 17% of what's left of their total annual income from all wages, salaries, and pensions after subtracting a personal allowance. Uh, oh, "allowances". Here comes the higher math. Here come the forms. Right? Nope. There would be only four allowances:
- $23,200 for married filling jointly
- $14,850 for single head of household
- $11,600 for single
- $5,300 for each dependent child
No more, tax credits to figure, deductions to keep up with, or loopholes to look for. In fact, the entire tax return form would be printed -- on a postcard.