There is a lot to be said about some form of a Flat Tax, and scrapping totally the current tax code, and Steve Forbes said it well, again, on 9/20/11....

"Publisher and former presidential candidate Steve Forbes says a flat tax is still the best way to balance the budget and get the economy moving again.

"I think about 26 countries have the flat tax now, and it’s worked wherever it’s been tried," Forbes tells The Fiscal Times.

"You have a low rate, generous deductions for adults and for children, and you can literally do your tax return on a single sheet of paper.”

The $200,000-to-$250,000 a year incomes President Barack Obama considers “rich” occur during a couple’s peak earning years, says Forbes, making increasing taxes on salaries unfair.

“Also, because of our tax code, a lot of businesses are taxed at personal rates, so it will hurt businesses that employ 20-50 people,” he says. “It’s a capital destroyer.”

“Buffett only pays 17 percent of his income in taxes. When he talks, he mixes taxes on dividends and capital gains with taxes on salaried income.”

In this country, Forbes explains, salaried income is taxed at the federal level at the high rate of 35 percent, and when state income taxes are added that figure can rise to 45 percent.

“Raising taxes on dividends, which Buffett implies we should do, destroys capital,” Forbes says. “And raising the tax on capital gains, where there is no certainty, as the market’s always reminding us, reduces risk-taking, which hurts enterprises for the future.”

Forbes says Congress “should repeal Obamacare and start over for a more patient-oriented health care system,” and “repeal Dodd-Frank because it does far more harm than good."

Pensions and Investments reports that a proposal from the Brookings Institution to replace the current 401(k) tax deduction with a flat tax credit has opened the door for further congressional brainstorming on ways to boost retirement savings, despite a lukewarm response from senators and dim prospects for legislative change.
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More specifics on his Flat Tax proposal were stated by Forbes in 1995:

"America needs to take a new road, one toward an expansion future that is bigger and better than our past. That's why I'm proposing today, and will be talking about throughout my campaign, a liberation movement to take power away from Washington and put it in the hands of the people. A "Boston Tea Party," if you will, that puts an end to the taxing and spending party in Washington, DC. I mean to free the mighty American economy from political repression.

The first element is dramatic pro-growth tax cuts.

I'm not talking "revenue neutral" fiddling with the tax code, the usual game in Washington that pretends to cut some taxes while raising others. And I'm not talking about fiddling around the "margins" cutting taxes that only help the well-to-do.

I am talking about across-the-board tax cuts that are deep and wide and permanent, that reach down to all Americans and get the suffocating weight of the IRS off their backs.

Start by scrapping the tax code. Don't fiddle with it. Junk it. Throw it out. Bury it. Replace it with a pro-growth, pro-family tax cut that lowers tax rates to 17% across the board and expands exemptions for individuals and children so that a family of four would pay no taxes on the first $36,000 of income.

Not one cent to the IRS on the first $36,000. Anything over that would be taxed at a flat, fair 17%.

The flat tax would be simple. You could fill it out on a postcard. It would be honest. It would eliminate the principal source of political corruption in Washington. It would be fair. Millions of people would be off the federal income tax rolls.

There would be no tax on Social Security. No tax on pensions. No tax on personal savings. It would zero out capital gains taxes. It would set off a boom by letting people keep more of what they earn and by lowering barriers to risk taking."