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17% is the tax rate of the Flat Tax is proposed to be a year after enactment 19% is where it is proposed to start out. Flat Tax keeps SS/Medicare payroll taxes the same as now, and only ammends the current income tax law.

Here's how tax rates come out for the Armey/Shelby Flat Tax, a flat individual/corporate income tax, leaving all SS/Medicare, Federal Unemployment, excise taxes and tariffs in place and unchanged.

http://www.library.unt.edu/govinfo/subject/vital.html

"The chart below shows a hypothetical set of flat tax rates and allowances that would result in revenue neutrality. This model, produced by the Congressional Budget Office shows that all federal income tax revenues could be fully replaced by a system with a flat tax rate of 13.1 percent and no deductions. Allowing total deductions for a family of four to reach $36,800 (more than double the amount allowed in 1995) would require a 19.9 percent rate."

Joint Economic Committee

Revenue Neutral Tax Rates for Alternative Allowances and Exemptions Under a Flat Tax

Standard Allowances Option 1 Option 2 Option 3 Option 4 Option 5

Single $13,100 $13,100 $ 6,550 $ 6,550 $0

Joint $26,200 $26,200 $13,100 $13,100 $0

Head of Household $17,200 $17,200 $ 8,600 $ 8,600 $0

Dependent Exemption $ 5,300 $ 2,650 $ 5,300 $ 2,650 $0

Revenue Neutral Tax Rate 19.9% 19.4% 16.8% 16.3% 13.1%

Source: Congressional Budget Office, 1995.

**Revenue Neutral Tax Rates for Alternative Allowances and Exemptions Under a Flat Tax**
Standard Allowances	Option 1	Option 2	Option 3	Option 4	Option 5
Single	$13,100	$13,100	$ 6,550	$ 6,550	$0
Joint	$26,200	$26,200	$13,100	$13,100	$0
Head of Household	$17,200	$17,200	$ 8,600	$ 8,600	$0
Dependent Exemption	$ 5,300	$ 2,650	$ 5,300	$ 2,650	$0
Revenue Neutral Tax Rate	19.9%	19.4%	16.8%	16.3%	13.1%

Under the Armey "flat" tax, as it is currently proposed,(HR1040 introduced 3/15/2001) a single person would pay:

7.65% ---- 7.65%(SS/Medicare) tax on wages/salary income below $13,600,
26.65% --- 19% + 7.65%(SS/Medicare) tax on wages/salary and other taxable income from $13,600-$75,000
20.45% --- 19% + 1.45% Medicare tax on wages/salaries and other taxable income from $75,001 up.
0% -------- on savings & bond income and stock dividends.

And that single person's business/employer pays,

19% ------ on earnings (Gross Receipts less allowed business deductions, exemptions and credits)
13.65% ---- 7.65% on SS/Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's on wages up to $80,000.
7.45% ----- 1.45% on Medicare employment excises + 6% federally mandated unemployement excises levied on each employee's wages greater than $80,000.
Plus additional selective excises and tariffs dependant upon the nature of business engaged in.

Note: The base "Flat Tax Rate" is subject to meet revenue neutrality requirements under the Budget Enforcement act. The 19% rate stated in the Armey/Shelby Flat Tax proposal does not meet these requirements at the exemption levels stated and would of necessity be adjusted upwards, and/or personal exemptions and business deductions be reduced to meet revenue neutrality criteria for enactment.