TX Gov. Rick Perry proposes a "flat tax"

Texas Gov. Rick Perry said Wednesday that he wants to scrap America's current tax laws and impose a flat tax.

He called the plan "an economic growth package that will create jobs, create growth and create investor confidence in America again."

"It starts with scrapping the three million words of the current tax code, and starting over with something much simpler: a flat tax," Perry said.

A flat tax applies the same tax rate to income at every level. The current tax code is progressive, taxing higher incomes at higher rates and lower incomes at lower rates.

Many conservatives argue a flat tax would be simpler and fairer because everyone would be taxed at the same rate.

Liberals and many moderates say a flat tax would make the tax system more regressive, giving big tax breaks to the wealthy while making low- and middle-income families pay more.

In his book, "Fed Up!" Perry suggests the flat tax as a possible policy prescription:

"One option would be to totally scrap the current tax code in favor of a flat tax, and thereby make taxation much simpler, easier to follow and harder to manipulate," Perry writes in his book. "Another option would be to repeal the Sixteenth Amendment to the Constitution (which authorizes the taxation of income) altogether, and then pursue an alternative model of taxation such as a national sales tax or the Fair Tax."
(via the AP)