Freedom, Fairness, and Justice

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Freedom, Fairness, and Justice

• Why the United States needs to switch to a Flat
  Tax
• -Shariff Tanious

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What is a Flat Tax?

• An income tax that taxes all individuals at one
  fair rate
• Individuals are granted a personal allowance
  based on marital status and number of dependents
• A Flat Tax is the only way the U.S. can restore
  integrity to our tax system

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How does it work?

• The Armey-Shelby Flat Tax is a flat tax that
  taxes at a rate of 17, after all personal
  allowances are subtracted from an individuals
  income
• For Married Couples 26,000 plus 5,600 for each
  dependant
• For Single Head of Households16,600
• For Single Individuals 13,000

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Individual Tax Form
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Flat Tax for Businesses

• Same low 17 rate for businesses as well as
  individuals
• One simple form, unlike the current system, where
  there are hundreds
• Encourages investments to increase employment,
  capital, and growth
• Ensures all businesses are treated the same,
  regardless of size

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Business Tax Form
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Our Current System

• The Internal Revenue Code is over 17,000 pages,
  not including court decisions and letter rulings
• Around 5,557,000 words Almost SEVEN times the
  length of The Bible
• Approximately 293,760 trees are cut down each
  year to supply the over 8 Billion pages of paper
  used to file taxes in the United States

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Current System Continued

• In 1993, the IRS gave more than 8,500,000 wrong
  answers to taxpayers
• Congressmen on the 1994 Tax Writing Committee
  received on average 413,072 for their reelection
  campaigns from special interests, looking to have
  special tax shelters written in for their group

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Current System Continued

• It takes approximately 653 minutes to fill out an
  IRS 1040 Form
• Every year, hundreds of pages are added to the
  tax code, making it more and more complicated for
  the regular citizen to do their taxes

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Russian Flat Tax

• In 2001, Russian President Vladimir Putin
  instituted a Flat Tax in Russia
• Since its institution, the Russian economy has
  grown at a rate of 10
• Government revenue, adjusted for inflation, has
  increased over 50
• Incomes and Businesses are taxed at 13

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Russian Flat Tax Continued

• Tax evasion in Russia has almost completely
  disappeared
• Compared to European economies, the Russian
  growth is spectacular
• Remember the saying To the victors go the
  spoils? It must not be true. We won the Cold
  War, but Russia gets a flat tax while America is
  stuck with a Byzantine tax system based on
  class-warfare ideology.
• Daniel J. Mitchell, Ph.D.

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Iraqi Flat Tax

• Saddam Hussein had a top tax rate of 45,
  stifling all entrepreneurship in Iraq
• A flat tax will help their economy grow,
  increasing the amount of available capital
• An Iraqi Flat Tax saves American taxpayers money,
  since the Iraqis will need less in terms of
  foreign aid

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Armey-Shelby Flat Tax

• The Armey-Shelby Flat Tax was proposed in the
  Freedom and Fairness Restoration Act of 1997
• It was proposed by former Rep. Dick Armey (R-TX)
  and Sen. Richard Shelby (R-AL)
• This was Americas first attempt at instituting a
  flat tax

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How would it work?

• It would offer a generous personal exemption for
  all individuals, then tax the remaining income at
  a single low rate of 17
• It only takes a couple of minutes to figure out
  an individuals tax burden, making the whole
  process less stressful

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Economic Results

• Individuals and Families will have more
  disposable income, increasing spending, saving,
  and charitable giving
• This increased spending will assist in the growth
  of our corporate sector, increasing the number of
  jobs and services
• Unfair double taxation would be completely
  eliminated

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More Economic Results

• Businesses have to pay less in compliance under a
  flat tax, which especially helps small businesses
• This increase in capital for small businesses
  allows them to invest their money into local
  economies, creating jobs and improving localities
• This progress is hindered under the current system

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What it really does

• The flat tax is not only about economic freedom,
  but individual freedom as well
• It is about restoring the right to individuals to
  keep money they earn, and decide on how best to
  spend it

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Survey Results

• 17 teachers and administrators responded to the
  anonymous survey that asked for income, taxes
  paid, and other items

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Survey, Part I
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Survey, Part II
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History of the Income Tax

• The income tax has its beginnings in the early
  20th Century with the passage of the 16th
  Amendment
• 1916
• 1.5 Million in income 15 Tax Rate
• 1917
• 40,000 in income 16 Tax Rate
• 1.5 Million in income 67 Tax Rate

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The IRS

• The IRS has more employees than the Central
  Intelligence Agency, Federal Bureau of
  Investigation, and Drug Enforcement Agency
  combined, and its budget makes it a bigger
  consumer of tax dollars than the Departments of
  Commerce, State, or the Interior.
• -Daniel J. Mitchell, Ph.D.

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The IRS Continued

• The IRS spends over 13,700,000,000 of tax money
  to enforce and oversee the tax code
• In 1993, according to the U.S. General Accounting
  Office, the IRS could not account for 64 of its
  budget
• The Internal Revenue Code needs to be repealed in
  order to have an organization that can properly
  administer a fair and flat tax code

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Economic Effects

• Saving will increase by an estimated 7, fueling
  economic growth
• Under a Flat Tax, individuals will have more
  disposable income, increasing consumer spending,
  adding more money to the economy
• Compliance costs, both for individuals and
  businesses, will dramatically decrease

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More Economic Effects

• Critics point that the government will receive
  less income, which is inaccurate, given the
  success in other nations
• Families are able to send their children to
  institutes of higher learning with the income
  that is saved under a Flat Tax

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More Economic Effects

• Education is, as Federal Reserve Chairman Allen
  Greenspan noted, an important part of a growing
  economy
• This increase in education allows the United
  States to prepare for the future
• Double Taxation will end under a flat tax,
  putting to an end the harsh unnecessary taxes
  that stifle growth, especially small businesses

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More Economic Effects

• Under the current system, a single dollar of
  income can be taxed up to FOUR times
• Income Tax
• Corporate Income Tax
• Capital Gains Tax
• Estate (Death) Tax
• This will be eliminated with a Flat Tax, that
  only taxes each dollar ONCE, the fair way

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The Moral Case for a Flat Tax

• The Flat Tax is really about restoring fairness
  and integrity to the system of taxation
• The American people would choose the flat tax
  because it removes the invasiveness of the
  government, reduces rates, liabilities, and the
  threat of an audit

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The Moral Case for a Flat Tax

• There is a moral case for the flat tax because
  the flat tax is fundamentally about freedom. I
  am not talking about freedom that the great free
  market economist Ludwig von Mises condemned as
  the freedom to let soulless forces operate.
  That is not freedom at all that is just tyranny
  in another guise. Rather, I am talking about the
  freedom to let individuals choose.
• -Steve Forbes

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The flat tax is truly about freedom and equality
for everyone restoring the integrity to our
taxation system and in America, the land of the
free, it is long overdue.