Abolishing the whole US Tax Code and implementing a Flat Tax for ALL--individuals AND corporations--with little or no tax on incomes below $40,000 or so, is the only thing that makes sense.
But it's not going to happen with all the tax accountants, tax lawyers, and lawyers in the Congress and Administration who feed at this trough.
This was proposed in 2009 by deceased Sen. Specter, a flat tax calculation method that fits on a post card, and it makes sense!
(that's why we'll never see it happen, sadly):
Senator Arlen Specter’s Proposal
S. 741. The Flat Tax Act of 2009 was introduced on March 30, 2009, and referred to the Senate Finance Committee. This act is modeled after the Hall-Rabushka proposal, which was previously discussed. The Specter flat rate consumption tax would replace the federal individual and corporate income taxes and the federal estate and gift taxes.
This proposal has two components: a wage tax and a cash-flow tax on businesses. It is essentially a modified VAT, with wages, salaries, and pensions subtracted from the VAT base and taxed at the individual level.
The individual wage tax would be levied at a 20% rate on all wages, salaries, and pensions. In addition, government employees and employees of nonprofits would have to add to their wage base the imputed value of their fringe benefits. The individual wage tax would have “standard deductions” that would equal the sum of the “basic standard deduction” and the “additional standard deduction.”
The “basic standard deduction” would depend on filing status. For tax year 2010, the basic standard deduction would have been the following:
• $25,000 for a joint return;
• $25,000 for a surviving spouse;
• $18,750 for a head of household;
• $12,500 for a married taxpayer filing separately; and
• $12,500 for a single taxpayer.
The “additional standard deduction” would be an amount equal to $6,250 for each dependent of the taxpayer. All deductions would be indexed for inflation.
Congressional Research Service
See this and all other tax proposals for the year at:
http://assets.opencrs.com/rpts/R40414_20100319.pdf
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