The Armey proposal is a single flat rate for everyone, and the elimination of all deductions, (like home mortgage interest for example!) The rate would be 17% and the standard deductions would be raised accordingly. (Single \$11,300; Head of Household \$14,850; Married Filing Jointly \$22,700; Children Allowance \$5,300 each). The deductions were reduced to keep the plan revenue neutral. There would be no direct personal income tax on interest, dividends or capital gains.

A big proponent is Steve Forbes though his proposal is slightly different. You can see his views on the flat tax This calculator now calculates his proposed tax as well. From Newsweek His numbers is around \$26,200 exemption for marrieds, with a \$5,300 per child exemption (that would be \$13,100 for singles assumption).

Phil Gramm wants to use a 16% rate with lower exemptions (\$22,000 Married, \$11,000 Single, \$5,000 per dependent), but maintaining deductions for mortgage interest and charitable contributions. Then he wants to index the capital gains to inflation before taxing them. Well, since figuring out everyone's indexed capital gains is not possible, that part out of the calculation is left out (i.e. no indexing). Thus only capital gains and non-wage income are additional income to tax.

This form compares the changes for income/deduction combinations.