I too favor a modified flat tax, but if that is done on the income tax, then the upper limit on Social Security tax should be removed as well, in order to keep the overall taxation from becoming regressive.
Mlsoft - eliminating transfer payments would have profound social effects, because the Feds use them as blackmail to get the states to toe a uniform line. If Oregon and Mississippi, to name two, were no longer beholden to the Feds for these payments, just imagine in which directions they might go...