Bill Clinton: “Well, of course, that's what Senator Bradley and Congressman Gephardt tried to do in '86. Basically, Bradley-Gephardt…”

“Well, of course, that's what Senator Bradley and Congressman Gephardt tried to do in '86. Basically, Bradley-Gephardt, the Tax Reform Act of '86 which President Reagan signed, was supposed to be that kind of bill. And what the--and it did move in that direction. Let me answer you this way. I think it would be a mistake to eliminate the charitable deduction and the home mortgage deduction. They're both a big part of our culture. And they also have a lot to do with the way America works now. And we learned in '86--we got a lot of things out of the Tax Reform Act of '86. We also learned that there were even then some unintended consequences which are not salutary, even though on balance--I mean, there was a lot of good in that bill. So I wouldn't be in favor of that. Now, the problem with all the flat tax proposals, notwithstanding what the candidates say about them, that every one--that the Treasury Department and the Congressional Budget Office, if you study them all--and there has been no flat tax proposal yet made for one tier anyway that would not either explode the deficit on the one hand, or if it's deficit neutral, it would raise taxes for everybody that makes less than $100,000 a year in the country. That's the basic problem with a flat tax. Now, to whatever extent you have more than one rate and it's more progressive, you can overcome that. But to whatever extent you do that, you get closer to the present system. So that's really the problem. I've looked at a lot of other ways of going at this to see if we could make it easier on people. You should know that the last year I have figures for, which was '92 or '93, 57 percent of the American people filed the simplest 1040 form--what is it, 1040 EZ--and paid taxes at 15 percent and took the standard deduction. So it's obvious that a lot of them made the decision that at least for their incomes they'd be better off just having a de facto flat tax. And I've asked the Treasury Department to come up with some other ways to simplify. We're also letting more people file electronically. We're trying to work it into the computer so everybody who has a State income tax or a local income tax can file one time for both the State and the Federal. I've asked people to study the British system. It's interesting-- Britain has an interesting system where two-thirds of the people never come into contact with the income tax system. If you decide at the beginning of the year that you're going to take the standard deduction, then you work out a deal, and they deduct it all, so you never have to file. You don't even have to file. You don't have to put anything in. Two-thirds of the workers never even touch the tax system. And they're by definition never audited because they didn't put it in. So they're not audited; they don't file; they don't do anything. They don't have to do anything. It's over. So there may be some--there may be a number of things we can do to simplify the system. But I have never seen a flat tax proposal that I thought would be both progressive and simple.”