Flat Rate Tax Act of 1985

Flat Rate Tax Act of 1985 - Amends the Internal Revenue Code to impose a ten-percent tax rate on the taxable income of every individual (including any estate and trust).

Increases the amount of the personal exemption from $1,000 to $2,000. Disallows income tax credits except the credit for tax withheld on wages. Repeals the minimum tax for taxpayers other than corporations.

Disallows exclusions from gross income except for: (1) social security benefits; (2) veterans' benefits; and (3) interest on certain governmental securities.

Disallows income tax deductions except for: (1) personal exemptions; (2) charitable contributions; (3) interest incurred for a principal residence or for investment property; (4) State and local income and real property taxes; and (5) trade and business expenses.