Newspaper article THE JOURNAL RECORD

The Scrap the Code Tour: Flat vs. Sales Tax Debate

Newspaper article THE JOURNAL RECORD

The Scrap the Code Tour: Flat vs. Sales Tax Debate

Article excerpt

Exactly how should the federal government go about collecting the $1.5 trillion it takes to run itself each year?

U.S. Reps. Billy Touzin, R-La, and Dick Armey, R-Texas, squared off Monday in a debate in Oklahoma City's National Cowboy Hall of Fame over exactly just that -- how to reform the federal tax code.

The pair has been touring the United States in town hall debates on how to reform the tax code. The name of the tour, in addition to sounding vaguely like a rock concert, should give the reader some clue as to where the two stand: The Scrap the Code Tour. Armey said Americans spend $200 billion each year in tax preparation costs. Touzin said Americans spend more time doing their taxes than they do earning money to provide food, shelter and transportation combined. To remedy the situation, Armey has proposed a flat tax and Touzin has proposed a national sales tax. Under the Armey flat tax measure, a 17 percent rate would be set with an initial exemption of $33,800 for a family of four. "(The exemption) is based on the presumption that you owe a duty to your family before you owe a duty to your country," Armey said. While the Armey system would retain the Internal Revenue Service, it would be reduced by two-thirds. His tax form would be the size of a postcard. Items such as interest income and dividends would be paid at the corporate level in the form of income taxes on businesses, leaving only wages, salaries and pensions to be reported. Familiar deductions, such as mortgage interest or charitable contributions, would no longer exist under the Armey proposal. In addition, medical insurance would no longer be recognized as a legitimate business expense, as it has since 1942. The Touzin retail sales tax proposal would provide for a 15 percent tax to be charged only at the retail level on all items, including groceries. The poor would receive credits toward their Social Security tax. "The income tax code punishes you for trying to make something or earning something or when you buy something made in America," he said. In addition, with a consumption tax, as opposed to an income tax, the citizen gets to decide how much to pay. …

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