Flat Tax Proposals

• There have been various proposals over the years regarding the imposition of a flat tax at the Federal level, with the flat tax rate set in a range from 10 to 20 percent, depending on the proposal. The arguments for a flat tax are that it would make the tax system easier since far fewer forms would be required. Proponents of a flat tax also claim that it would be a fairer system of taxation since different forms of income would be treated the same.
  
  

Federal Tax Rates

• The Economic Growth and Tax Relief Reconciliation Act of 2001 created the current federal tax rate brackets based on income. The EGTRRA mandated the phase-in over a period of time of 35, 33, 28, 25, 15 and 10 percent tax rate brackets. This represented a reduction of income taxes for most taxpayers.
  
  

Jobs and Growth Tax Relief Reconciliation Act

• The Jobs and Growth Tax Relief Reconciliation Act of 2003 was the last major piece of legislation regarding income tax rates at the federal level. The JGTRRA accelerated the tax rate reductions put into law by the EGTRRA so that many of the reductions would start in 2003 rather than 2006.