William Tauzin: “Let us talk about several alternatives that people have talked about to the United States Income Tax Code. We have heard…”

“Let us talk about several alternatives that people have talked about to the United States Income Tax Code. We have heard a lot about the flat tax. It was proposed, of course, in the Presidential campaign by Mr. Forbes, and our colleague, the gentleman from Texas has a flat tax proposal before this body. The flat tax is simply a flattening of all the IRS rates, the five rates we currently have, into a single flat rate. It also imposes a single flat rate on all businesses. I think it is a 17 percent, in that bill, on individuals, a 20 percent on businesses. So it is a vast improvement upon the current complex code. Is there a problem with that alternative? Yes; the problem with that alternative is that the 17-percent rate has to go up considerably when we start providing the necessary deductions for the home mortgage interest, perhaps for medicine and other things. The bottom line is that the real problem with the flat rate proposal is that it is still an income tax, and an income tax is an income tax is an income tax. It can become a fat, complicated tax after a few congressional sessions. Most importantly, it is still a double taxation system.”