Why the flat tax is wrong for America.

• Author: Camperell, Kevin J.

A number of tax proposals are being touted in Washington, D.C., under the moniker of "flat tax." These proposals are part of the process of reengineering our burdensome tax code.

Proponents of the flat tax point to their respective plans as a fairer and simpler way to raise revenue. These plans are designed to make the annual chore of tax preparation much easier and far less costly.

Although no significant details have been proposed and it is unlikely any meaningful legislation will be discussed or voted on in Congress for at least 12 to 24 months, the concept of a flat tax is gaining popularity with the general public, state legislatures and newspaper editorial boards.

The national debate over the flat tax is only beginning. The dissenting voices seem to be made up of "special interest" groups--the real estate industry, charitable organizations, tax attorneys and tax accountants. The general public is expected to soon join the national debate when it becomes understood that the various flat tax proposals will significantly increase the tax burden of Americans earning less than $100,000 per year.

The most heavily promoted flat tax plan exempts interest, dividends and investment gains from tax. A family with $50,000 of investment income may pay no income tax under these proposals, while a working family with the same $50,000 of income generated by one or two working family members will pay substantial income tax.

The general public is not aware that these flat tax proposals are for income tax purposes only; Social Security taxes will continue to be a burden in addition to the flat tax. Many low- and middle-income individuals pay more Social Security tax than income tax. The flat tax will not replace the Social Security tax system.

Over the past generation, America has moved toward and embraced what can be termed a "Western European-style Social Safety Net." This safety net includes Social Security, Medicaid, school lunch programs, aid to families with dependent children, youth work programs and general welfare. As America has moved toward Western European-style social programs, the number of individuals receiving funds from the government, many as their main means of support, has increased.

With these points in mind, the current flat tax proposals are wrong for America for a number of reasons:

[] The flat tax will significantly benefit individuals who do not work for a living. The unemployed, under employed and the rich will benefit. Those...