okay, but what happens to the employee who is also self employed?  Has to do 2 returns?  Not to mention that means that capital gains and interest earned are no longer taxable. 

What happened to the corporate tax for those who work for their own corporation?  Act as an employee but change wages every year or does extra profits stay in the corporation?

Unless you rule out corporate taxes entirely and remove more of the existing schedules, it still stays pretty ugly.  The simplicity you seek is basicly page one of the 1040.  It is the supporting forms that start to raise a person's dander.