Easy as One, Two, Three
The Heritage Foundation's New Flat Tax (NFT), part of Saving the American Dream, replaces today's complex tax system with one that is simple and fair. The New Flat Tax is simple, revenue-neutral, and will allow America to achieve its full economic potential. Among the details:
- Currently, in addition to the income tax, the federal government imposes a payroll tax, death tax, and a slew of excises. The New Flat Tax replaces them all for individuals, families, and businesses with one tax system with one tax rate of roughly 28 percent.
Two Tax Credits: The New Flat Tax retains the Earned Income Credit to preserve the level of income support for low-wage workers. And low- and middle-income families also receive a tax credit of $3,000 ($2,500 for singles) toward the purchase of health insurance.
Three Deductions: The only remaining deductions are for higher education, gifts and charitable contributions, and an optional home mortgage interest deduction.
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