No there is a $12500.00 deductible.
Take the $ 50,000 and
deduct $ 12.500 ea. for you
and every dependent.
Deduct any mortgage interest you pay,
deduct any charitable contributions you made
and deduct all state/local taxes you paid.
You are taxed 20% on what is left after the above.
(or you can use existing income tax code)
Example:
....................$50,000 wages
you and spouse.....[25,000] (12,500 ea)
mortgage interest [ 5,000]
charity............[ 1,000]
State Taxes &
Local Taxes .......[ 7,000]
...................________
Net Income.........$ 12,000
Taxes = $ 2,400.00
Another:
Wages............50,000
Deduction for
Family of 4......50,000
You pay -0-
That is the way I am reading it. Correct me if wrong anyone.
This clarifies the flat tax section a little more too.
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FIX THE TAX CODE
Institute Individual Flat Income Tax Rate of 20%
Allow Individuals to Choose Existing Tax Code or Simple Flat Tax System
Preserve Deductions for Mortgage Interest, Charity, and State/Local Taxes
Include Standard Exemption for Individuals/Dependents of $12,500
Standard Exemptions and Other Deductions are Phased Out for Filers with Annual Incomes Above $500,000
Reduce Corporate Income Tax Rate to 20% to Enhance American Competitiveness
Eliminate Corporate Loopholes and Special-Interest Tax Breaks
Transition to a Territorial Tax System
Allow Locked-Up Overseas Capital to be Brought Back to the U.S. at a Reduced Tax Rate of 5.25%
Eliminate Tax on Social Security Benefits
Eliminate Tax on Dividends and Capital Gains
Eliminate Death Tax
No Federal Sales Tax or Value-Added Tax
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Also, here is more regarding the individual tax choice, if choosing the flat tax option over the reformed current tax code:
Institute Individual Flat Income Tax Rate of 20%
By implementing a simple and optional flat tax that will allow Americans to file their taxes on a postcard, up to $483 billion a year could be saved by American families and businesses in reduced compliance costs alone.13 A simpler, flatter tax code – free from the dozens of individual carve-outs that make the code so incomprehensible – will remove the disincentives to work, entrepreneurial risk-taking, and investment that form the foundation of a strong and vibrant economy.
Lower- and middle-income families will be able to take advantage of an optional 20% flat tax rate that includes generous standard exemptions of $12,500 for individuals and their dependents, as well as deductions for mortgage interest, charitable contributions, and state and local taxes.
Nearly two dozen countries worldwide have adopted flat tax systems, with thirteen of them transitioning to the new system within the last decade.14 Estimates by the non-partisan Tax Foundation show significant taxpayer savings from reduced compliance costs alone. If given the option of a simple, postcard-sized tax return, individual taxpayers could save thousands of dollars each year in tax compliance costs.15 And by removing the myriad distortions in the current tax code that impede the efficient allocation of capital, economic growth will be unleashed across the country, creating new jobs and higher incomes for all Americans.
The new flat individual income tax system will be designed so that federal individual income tax receipts will be equal to approximately 8% of the country’s gross domestic product (GDP), in line with the historical share of federal individual income tax revenue relative to the size of the economy 16 The cumulative tax changes proposed, including those to the corporate income tax system, will be designed so that total federal revenues average 18% of GDP, the 50-year U.S. average for federal tax receipts.17 The federal payroll tax will not be affected by the new flat tax system.