Ashcroft favors flat tax that retains mortgage deduction

U.S. Sen. John Ashcroft, addressing the National Association of Realtors Nov. 9, said it is time for a "fair flat tax" that retains the mortgage interest deduction and takes into account income earned at the lower end of the scale, according to a press release from the NAR.

Ashcroft said it was time to simplify the tax code while encouraging Americans to continue to achieve homeownership. Ashcroft spoke to Realtors at NAR's annual convention and trade exposition, held Nov. 6-9. Nearly 17,000 Realtors and guests attended.

Ashcroft outlined what he called a fair flat tax that included four major deductions. The deductions within his plan include retaining the mortgage interest deduction, deductions for charitable contributions, deductions for state and local taxes and health care costs, the release stated.

"It is time for the American people to keep more of what they earn so they can pass on a better life to the next generation," Ashcroft said.

According to Ashcroft's plan, three-fourths of all taxpayers, those earning less than $68,400 annually, would pay 10 percent of their income in federal taxes. Those earning more than $68,400 would pay 25 percent of their annual income to the federal government.

He focused on the need to revise the existing tax code that penalizes married couples. He said marriage, as a core value of society, should not mean owing more to the government. An additional $29 billion in taxes was paid this year by people who are married.

Ashcroft's tax plan proposes a $1.7 trillion tax cut over 5 years. His plan calls for each individual in a family to be allowed to set aside $5,000 in a tax-free IRA account. Ashcroft proposed a 10 percent maximum charge on capital gains and the elimination of estate taxes.

Other proposals by Ashcroft include eliminating the national debt within 30 years. Under that proposal, federal government would pay $12 billion toward retiring the debt the first year, with subsequent payments increasing by $12 billion each year.[[In-content Ad]]