GEPHARDT'S 10 PERCENT SOLUTION

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Rather than let the tax-reform juggernaut pass the Democrats by, House Minority Leader Dick Gephardt has now proposed a hybrid flat tax plan which would cut the top income-tax rate for three-quarters of Americans to 10 percent and eliminate all deductions except the one for mortgage interest. "It has a Nixon-going-to-China quality about it," saysTIME's Karen Tumulty, noting that at least two GOP presidential candidates (and counting) have already embraced some form of flat tax. "To have somebody like Gephardt on board," she adds, "suggests it may actually happen." The Missouri Democrat attacked the leading GOP plan,House Majority Leader Dick Armey's 17 percent flat tax, as a prelude to "the largest redistribution of income in the history of the country" from the middle class to the rich. Under his populist alternative, Gephardt claims, half of Americans wouldn't have to file income tax returns at all, while wealthier people would pay higher rates of up to 34 percent. Even in a Republican world, Tumulty says, Gephardt -- who co-wrote the last major tax reform package in 1986 -- still stands to get a hearing.