Who would benefit from a flat tax?
To answer this question, Heritage Foundation analysts used income tax data extracted from the U.S. Bureau of the Census Current Population Survey for March 1997 and the Heritage Individual Income Tax Simulation Model in order to simulate tax payments under a flat tax.15 The Current Population Survey provided income, demographics, and tax data for 10,149,000 Hispanic taxpayers. Income variables from the Survey were employed to create a tax base for the flat tax similar to that described in H.R.1040, the flat tax legislation recently proposed by Representative Richard Armey (R-TX). This tax base consists of wages and salaries, unemployment compensation, employer-provided health care benefits, and income from previously untaxed pensions and other retirement income streams. Each adult taxpayer was given a $10,000 allowance, and each child of a taxpaying family received a $6,000 allowance. Thus, a married couple with two children making $50,000 in income would deduct $32,000 from that amoun
