- The Washington Times - Thursday, April 18, 2002

It's been three days since Americans filed their taxes. Three days for the hangovers and headaches to pass and memories of late-night lines at the post office to fade.

Yet millions of taxpayers are still reeling from the mind-boggling exercise. They tell themselves and anyone who will listen that there must be a better way.

Is it any wonder? A government report issued last week found that over 2.2 million taxpayers surrendered $1 billion more than was necessary just to avoid the headaches and hassles on Tax Day. It's facts like these that lend life to Calvin Coolidge's description of federal taxation as "legalized larceny."

Isn't it obvious that, with the American ingenuity and know-how that can put men on the moon and store libraries of information on a single chip, we can come up with a better alternative for collecting taxes?

I've studied tax reform for over three decades. For me, there's no clearer solution to the flawed code we have today than a flat tax. It treats everyone the same. No more favoritism toward some citizens and harassment of others. No tax shelters. No tables. Nothing.

Under a flat tax, power would shift back to the ordinary citizen. You pay one flat rate, and that's the end of April 15th. The folks at the IRS will return to their humble task as collectors of revenue servants of the people, not their supervisors.

But there is good news: Although Congress has yet to consider a flat tax, the recent tax cuts enacted into law are moving us in that direction.

I believe that the tax relief plan Congress passed last year embodies many of the principles found in the flat tax. It offers taxpayers a brief but hopeful glimpse of the benefits of a single tax rate.

A closer look at the plan highlights this revolutionary reform movement in six key areas:

First on marginal rates. While Democrats balked at the president's efforts to flatten marginal rates from five brackets to four, the final package lowered rates across-the-board. A flat tax creates only one bracket and pegs the rate at 17 percent.

Second, the individual alternative minimum tax (AMT) was created to nab taxpayers that the regular system didn't get. Our plan took a step in the right direction by providing Americans some relief. The flat tax would eliminate AMTs altogether.

Third, the tax code is riddled with penalties that tax two married individuals more than if they were single. The new law provided some relief. The flat tax contains no marriage penalties.

Fourth, for decades the federal government has wrongly taxed individuals in death what they couldn't get from them when they were alive. Our plan repealed the death tax. So would a flat tax.

Fifth, the new law expanded individual retirement accounts (IRAs) and 401(k) plans so Americans can save more for their retirement, tax free. A flat tax would stop punishing savings.

Finally, our new economy is shackled by an ancient, outdated tax system. Businesses are forced to use complicated depreciation schedules and deduct the costs over several years. The jobs bill passed last month allows businesses to expense 30 percent of their investments. A flat tax would allow businesses to deduct 100 percent of their expenses. We're nearly a third of the way there.

In short, all of the tax changes over the last two years begin to address problems the flat tax would completely fix.

In a world of deductions, tax breaks and loopholes, we are all hostage to political fortune, never knowing what government will do next. We often hear politicians promising even more "generous" deductions, as if they were doing Americans some favor by letting them keep more of what was rightfully theirs.

That's the beauty of the flat tax. It offers not only a world of simplicity, but stability. We'll know what to expect. Our futures will not rest in the hands of greedy politicians or restless bureaucrats, needing one more tax dollar to fund one more program. We won't rely on the generosity of Washington, but on our own efforts, the fruits of our own labor and industry.

Simple? Yes. Easy? No.

The Republican plan has given all tax reform advocates the foothold we need to climb even higher toward fundamental changes to a tax code that has outlived its usefulness.

Of course, the bottom line of any tax reform movement is found in Americans' pocketbooks. Nearly 100 million taxpayers will keep more of what they earned, and businesses will create the jobs that keep this economy rolling.

The first installment of the president's plan is under way, and promises more in the future. That's why the House of Representatives will vote today to make those cuts permanent, because economic growth shouldn't start and stop based on some arcane Senate rule.

Monday marked my last Tax Day as a member of Congress, but more importantly for all of us, it marked the first Tax Day under the Republican plan.

Tax reformers have reason to celebrate. One giant step in the journey toward fundamental tax reform. One bold stroke for freedom.

Change the tax code, and we'll have changed the world. Nothing we could do no other political reform would improve the lives of all Americans and make April 15 just another normal day.


House Majority Leader Dick Armey is a Texas Republican.

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