In his second term, Bush has identified further tax reform as a top goal. This could include a push for a flat tax, one in which all income groups are asked to pay the same rate.
Two tax cuts currently before Congress would flatten taxes further - if their proponents overcome objections to measures that would add to the already large budget deficit.
Many conservatives see the shift to a flatter system as progress. It leaves more money of the well-to-do untaxed, and thus available for the investment that creates jobs and prosperity. Eventually, a truly flat tax system could be simpler than the current one, encrusted by years of detailed congressional changes in the law to please various constituents.
Simpler tax filing would be welcome to most Americans. A new AP-Ipsos poll finds that most Americans think federal income taxes are too complicated, but they're not eager to get rid of some deductions and tax credits. And when asked about instituting a flat tax, a majority doesn't like the idea. Some 57 percent of those surveyed say people with higher incomes should pay a higher tax rate, while 40 percent thought tax rates should be the same for everyone.
In 1913, only 0.5 percent of the population paid the tax, and rates rose from 1 percent to 7 percent as income increased. That income tax level has risen, of course, but progressivity remained an important element.
The system still has progressivity, but that element is shrinking.
When the top 1 percent of taxpayers, those making an average $978,000 last year, sent in their tax forms for 2004 to the Internal Revenue Service in recent weeks, on average they paid 24.6 percent of their income in federal taxes. That rate is down 4.3 percentage points from pre-Bush tax law.