While a flat tax is a good idea, IMHO, simply because it reduces so much work and worry, and virtually eliminates the IRS, you have to be careful about who is proposing the issue and what their agenda is.
Steve Forbes is a good example of a guy who promotes the flat tax, but does so for his own good, not because of some altruistic sense of doing good for the little guy. His proposal, and those of many others, do not allow for taxation of investment returns and dividends.
Since Steve Forbes has never really done anything in his entire life, other than ride his daddies coat tails, this would make him pretty much tax free, along with the majority of other wealthy people in the country (Paul Allens, Bill Gates, etc). On top of that, his plans typically give reflief to the poor (typically incomes around 25K and less). So guess what? Mr. Forbes, once again, has decided that the cost to run this country should come out of the pockets of the middle class, since the rich and the poor are exempted.
A flat tax is only a good idea if it applies across the board to everybody and every source of income. When you start playing favorites, you get in trouble, big time.
My recommendation is a flat 17-20% tax on everything that is, under today's tax laws, considered income, including dividends, and interest income from investments, ROI, etc... The tax rate would reduce itself to 15% for households with incomes under 30K, 10% on households from 27,500 to 25,001, and 0% to households under 25K.
THis allows us to give the poor an advantage tax-wise, to help them pull themselves up by their boot straps. It does not play favorites with the insanely wealthy, and does not overburden the middle class. Once you get rid of deductions and all of that crap, you end up having about the same rate of tax income to the government as before with higher rates and deductions. Oh, and you get to reduce the operating budget of the IRS by MILLIONS to save more money...
