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Encyclopedia > Flat tax
Public finance
This article is part of the series:
Finance and Taxation
Taxation
Income tax  ·  Payroll tax
CGT ·  Stamp duty  ·  LVT
Sales tax  ·  VAT  ·  Flat tax
Tax, tariff and trade
Tax haven
Tax incidence
Tax rate  ·   Proportional tax
Progressive tax  ·   Regressive tax
Tax advantage

Economic policy
Monetary policy
Central bank  ·   Money supply
Gold standard
Fiscal policy
Spending  ·   Deficit  ·   Debt
Policy-mix
Trade policy
Tariff  ·   Trade agreement
Finance
Financial market
Financial market participants
Corporate  ·   Personal
Public  ·   Regulation
Banking
Fractional-reserve
Full-reserve  ·   Free banking
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A flat tax (short for flat rate tax) is a tax system with a constant rate. Usually this would refer to household income, and possibly corporate profits as well, being taxed at one marginal rate. Not to be confused with Political economy. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Monetary policy is the process by which the government, central bank... In macroeconomics, money supply (monetary aggregates, money stock) is the quantity of currency and money in bank accounts in the hands of the non-bank public available within the economy to purchase goods, services, and securities. ... For other uses, see Gold standard (disambiguation). ... Fiscal policy is the economic term that defines the set of principles and decisions of a government in setting the level of public expenditure and how that expenditure is funded. ... Government spending or government expenditure consists of government purchases, which can be financed by seigniorage (the creation of money for government funding, at a heavy price of high inflation and other possibly devastating consequences), taxes, or government borrowing. ... A budget deficit occurs when an entity (often a government) spends more money than it takes in. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Government debt (also known as public debt or national debt) is... This article does not cite any references or sources. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        For other uses of this word, see tariff (disambiguation). ... A trade pact is a wide ranging tax, tariff and trade pact that usually also includes investment guarantees. ... Finance studies and addresses the ways in which individuals, businesses, and organizations raise, allocate, and use monetary resources over time, taking into account the risks entailed in their projects. ... This article does not cite any references or sources. ... There are two basic financial market participant catagories, Investor vs. ... Domestic credit to private sector in 2005 Corporate finance is an area of finance dealing with the financial decisions corporations make and the tools and analysis used to make these decisions. ... Personal finance is the application of the principles of finance to the monetary decisions of an individual or family unit. ... This article does not cite any references or sources. ... For other uses, see Bank (disambiguation). ... Fractional-reserve banking refers to a financial system in which some fraction of the deposits can be used to finance profitable but illiquid investments. ... Full-reserve banking is a theoretically conceivable banking practice in which all deposits, banknotes, and notes in a financial system would be backed up by assets with a store of value. ... Please wikify (format) this article or section as suggested in the Guide to layout and the Manual of Style. ... Islamic banking refers to a system of banking or banking activity that is consistent with Islamic law (Sharia) principles and guided by Islamic economics. ... A flat tax, also called a proportional tax, is a system that taxes all entities in a class (typically either citizens or corporations) at the same rate (as a proportion of income), as opposed to a graduated, or progressive, scheme. ... “Taxes” redirects here. ... For other uses, see Corporation (disambiguation). ... This article or section does not cite any references or sources. ... In the tax system and in economics, the marginal tax rate refers to the increase in ones tax obligation as ones taxable income rises: marginal tax rate = Δ(tax obligation)/Δ(taxable income) This can be measured either by looking at the published tax tables (to get the official marginal...


Flat taxes, implemented as well as proposed, usually exempt household income below a statutorily determined level that is a function of the type and size of the household. As a result, so-called flat taxes are often not true proportional "flat" taxes as taxable income may not equal total income. A flat tax usually refers to the taxation of incomes but can be applied to consumption. Flat taxes are uncommon in advanced economies, whose nationwide taxes typically include a graduated tax on household incomes and corporate profits, such that the marginal tax rate rises as the income or profit of the taxed entity rises. However, nomenclature regarding flat taxes has become increasingly lax, in that taxes that are described as flat sometimes have little to differentiate them from other tax regimes, e.g. progressive taxes. A tax exemption is an exemption to the tax law of a state or nation in which part of the taxes that would normally be collected from an individual or an organization are instead foregone. ... The household is the basic unit of analysis in many microeconomic and government models. ... A flat tax, also called a proportional tax, is a system that taxes all entities in a class (typically either citizens or corporations) at the same rate (as a proportion of income), as opposed to a graduated, or progressive, scheme. ... Taxable income is the portion of income that is the subject of taxation according to the laws that determine what is income and the taxation rate for that income. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        An income tax is a tax levied on the financial income... A consumption tax is a tax on the purchase of a good or service. ... A progressive tax, or graduated tax, is a tax that is larger as a percentage of income for those with larger incomes. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        A progressive tax is a tax imposed so that the effective...

Contents

Recent and current proposals

Flat tax proposals have made something of a "comeback" in recent years. In the USA, former House Majority Leader Dick Armey and FreedomWorks have sought grassroots support for the flat tax. In other countries flat tax systems have also been proposed, largely as a result of flat tax systems being introduced in several countries of the former Eastern Bloc, where it is generally thought to have been successful, although this assessment has been disputed (see below).[1] This has elicited much interest from countries such as the US, where it has gone hand in hand with a general swing towards conservatism.[2] Motto: (traditional) In God We Trust (official, 1956–present) Anthem: The Star-Spangled Banner Capital Washington, D.C. Largest city New York City Official language(s) None at the federal level; English de facto Government Federal Republic  - President George W. Bush (R)  - Vice President Dick Cheney (R) Independence - Declared - Recognized... The Majority Leader of the United States House of Representatives acts as the leader of the party that has a majority control of the seats in the house (at least 218 of the 435 seats). ... Richard Keith Dick Armey (born July 7, 1940 in Cando, North Dakota) is a former U.S. Representative from Texas 26th Congressional District (1985–2003) and House Majority Leader (1995–2003). ... FreedomWorks is a non-partisan conservative non-profit organization based in Washington D.C. with over 850,000 grassroots activists. ... A grassroots movement (often referenced in the context of a political movement) is one driven by the constituents of a community. ... A map of the Eastern Bloc 1948-1989. ... For other uses of terms redirecting here, see US (disambiguation), USA (disambiguation), and United States (disambiguation) Motto In God We Trust(since 1956) (From Many, One; Latin, traditional) Anthem The Star-Spangled Banner Capital Washington, D.C. Largest city New York City National language English (de facto)1 Demonym American... Conservatism is a term used to describe political philosophies that favor tradition and gradual change, where tradition refers to religious, cultural, or nationally defined beliefs and customs. ...

See also Tax rates around the world

The countries that have recently reintroduced flat taxes have done so largely in the hope of boosting economic growth. The Baltic countries of Estonia, Latvia and Lithuania have had flat taxes of 24%, 25% and 33% respectively with a tax exempt amount, since the mid-1990s. On 1 January 2001, a 13% flat tax on personal income took effect in Russia. Ukraine followed Russia with a 13% flat tax in 2003, which later increased to 15% in 2007. Slovakia introduced a 19% flat tax on most taxes (that is, on corporate and personal income, for VAT etc., almost without exceptions) in 2004; Romania introduced a 16% flat tax on personal income and corporate profit on January 1, 2005. Macedonia introduced a 12% flat tax on personal income and corporate profit on January 1, 2007 and promised to cut it to 10% in 2008.[34] Albania would be implementing 10% flat tax from 2008.[3] Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        Comparison of tax rates around the world is a difficult and... The three Baltic states: Estonia, Latvia, and Lithuania The terms Baltic countries, Baltic Sea countries, Baltic states, and Balticum refer to slightly different combinations of countries in the general area surrounding the Baltic Sea. ... A tax exemption is an exemption to the tax law of a state or nation in which part of the taxes that would normally be collected from an individual or an organization are instead foregone. ... is the 1st day of the year in the Gregorian calendar. ... Year 2001 (MMI) was a common year starting on Monday (link displays the 2001 Gregorian calendar). ... vat can be a type of barrel used for storage. ... is the 1st day of the year in the Gregorian calendar. ... Year 2005 (MMV) was a common year starting on Saturday (link displays full calendar) of the Gregorian calendar. ... is the 1st day of the year in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st century. ...


In the United States, while the Federal income tax is progressive, five states — Illinois, Indiana, Massachusetts, Michigan and Pennsylvania — tax household incomes at a single rate, ranging from 3% (Illinois) to 5.3% (Massachusetts). Pennsylvania even has a pure flat tax with no zero-bracket amount. Taxation in the United States is a complex system which may involve payments to at least four different levels of government: Local government, possibly including one or more of municipal, township, district and county governments Regional entities such as school, utility, and transit districts State government Federal government // Federal taxation... Official language(s) English[1] Capital Springfield Largest city Chicago Largest metro area Chicago Metropolitan Area Area  Ranked 25th  - Total 57,918 sq mi (140,998 km²)  - Width 210 miles (340 km)  - Length 390 miles (629 km)  - % water 4. ... For other uses, see Indiana (disambiguation). ... This article is about the U.S. state. ... This article is about the U.S. State. ... This article is about the U.S. State. ...


Greece (25%) and Croatia are planning to introduce flat taxes.[citation needed] Paul Kirchhof, who was suggested as the next Finance minister of Germany in 2005, proposed introducing a flat tax rate of 25% in Germany as early as 2007, which sparked widespread controversy. Some claim the German tax system is the most complex one in the world.[citation needed] Paul Kirchhof (* February 21, 1943 in Osnabrück) is a German expert in law and finance. ... Taxation is one of the most criticized matters in Germany. ...


On 27 September 2005, the Dutch Council of Economic Advisors recommended a high flat rate of 40% for income tax in the Netherlands.[citation needed] Some deductions would be allowed, and persons over 65 years of age would be taxed at a lower rate. is the 270th day of the year (271st in leap years) in the Gregorian calendar. ... Year 2005 (MMV) was a common year starting on Saturday (link displays full calendar) of the Gregorian calendar. ...


In the United States, proposals for a flat tax at the federal level have emerged repeatedly in recent decades during various political debates. Jerry Brown, former Democratic Governor of California, made the adoption of a flat tax part of his platform when running for President of the United States in 1992. At the time, rival Democratic candidate Tom Harkin ridiculed the proposal as having originated with the "Flat Earth Society". Four years later, Republican candidate Steve Forbes proposed a similar idea as part of his core platform. Although neither captured his party's nomination, their proposals prompted widespread debate about the current U.S. income tax system. For the whistleblower, see Gerald W. Brown. ... The Democratic Party is one of two major political parties in the United States, the other being the Republican Party. ... Governor Arnold Schwarzenegger (left) and Governor Gray Davis (right) with President George W. Bush in 2003 The Governor of California is the highest executive authority in the state government, whose responsibilities include making yearly State of the State addresses to the California State Legislature, submitting the budget, and ensuring that... Federal courts Supreme Court Circuit Courts of Appeal District Courts Elections Presidential elections Midterm elections Political Parties Democratic Republican Third parties State & Local government Governors Legislatures (List) State Courts Local Government Other countries Atlas  US Government Portal      For other uses, see President of the United States (disambiguation). ... Presidential electoral votes by state. ... Thomas Richard Tom Harkin (born November 19, 1939) is a liberal Democratic Senator from Iowa, serving in his fourth senate term. ... A rendered picture of the Flat Earth model. ... The Republican Party, often called the GOP (for Grand Old Party, although one early citation described it as the Gallant Old Party) [1], is one of the two major political parties in the United States. ... For the boxer, see Stephen Forbes. ...


Flat tax plans that are presently being advanced in the United States also seek to redefine "sources of income"; current progressive taxes count interest, dividends and capital gains as income, for example, while Steve Forbes's variant of the flat tax would apply to wages only.[citation needed] For other senses of this word, see interest (disambiguation). ... A dividend is the distribution of profits to a companys shareholders. ... In finance, a capital gain is profit that is realized from the sale of an asset that was previously purchased at a lower price. ... For the boxer, see Stephen Forbes. ...


In 2005 Senator Sam Brownback, a Republican from Kansas, stated he had a plan to implement a flat tax in Washington, D.C..[citation needed] This version is one flat rate of 15% on all earned income. Unearned income (in particular capital gains) would be exempt. His plan also calls for an exemption of $30,000 per family and $25,000 for singles. Mississippi Republican Senator Trent Lott stated he supports it and would add a $5,000 credit for first time home buyers and exemptions for out of town businesses. DC Delegate Eleanor Holmes Norton's position seems unclear, however DC mayor Anthony Williams has stated he is "open" to the idea. Type Upper House President of the Senate Richard B. Cheney, R since January 20, 2001 President pro tempore Robert C. Byrd, D since January 4, 2007 Members 100 Political groups Democratic Party Republican Party Last elections November 7, 2006 Meeting place Senate Chamber United States Capitol Washington, DC United States... Samuel Dale Brownback (b. ... GOP redirects here. ... This article is about the U.S. state. ... ... This article is about the U.S. state. ... Chester Trent Lott Sr. ... Eleanor Holmes Norton (born June 13, 1937) is the non-voting Delegate from the District of Columbia to the United States House of Representatives (map). ... Anthony Allen Tony Williams (born July 28, 1951, in Los Angeles, California) is a United States politician who served as the fifth elected mayor of the District of Columbia from 1999 to 2007. ...


Flat taxes have also been considered in the United Kingdom by the Conservative Party. However, it has been roundly rejected by Gordon Brown, then Chancellor of the Exchequer for Britain's ruling Labour Party, who said that it was "An idea that they say is sweeping the world, well sweeping Estonia, well a wing of the neo-conservatives in Estonia", and criticised it thus: "The millionaire to pay exactly the same tax rate as the young nurse, the home help, the worker on the minimum wage".[4] The Conservative and Unionist Party, more commonly known as the Conservative Party is currently the second largest political party in the United Kingdom in terms of sitting Members of Parliament (MPs), the largest in terms of public membership, and the oldest political party in the United Kingdom. ... For others with the same or similar names, see Gordon Brown (disambiguation). ... The Chancellor of the Exchequer is the title held by the British Cabinet minister responsible for all economic and financial matters. ... The Labour Party is a political party in the United Kingdom. ...


Flat tax proposals differ in how they define and measure what is subject to tax.


Flat tax with deductions

US Congressman Dick Armey has advocated a flat tax on all income in excess of an amount shielded by household type and size. For example, draft legislation proposed by Armey would allow married couples filing jointly to deduct $26,200, unmarried heads of household to deduct $17,200, and single adults, $13,100. $5,300 would be deducted for each dependent. A household would pay tax at a flat rate of 17% on the excess. Businesses would pay a flat 17% rate on all profits. Others have put forth similar proposals with various rates and deductions. Armey defined income to include only salary, wages, and pensions; capital gains and all other sources of wealth appreciation were excluded from taxation under his proposal.[5] Richard Keith Dick Armey (born July 7, 1940 in Cando, North Dakota) is a former U.S. Representative from Texas 26th Congressional District (1985–2003) and House Majority Leader (1995–2003). ...


While campaigning for the American presidency in 1996 and 2000, Steve Forbes called for replacing the income tax by a tax at the flat rate of 17% of consumption, defined as income minus savings, in excess of an amount determined by the type and size of the household.[citation needed] For example, the exempt amount for a family of four would be $42,000 per year. For the boxer, see Stephen Forbes. ... A consumption tax is a tax on the purchase of a good or service. ...


Modified flat taxes have been proposed which would allow deductions for a very few items, while still eliminating the vast majority of existing deductions. Charitable deductions and home mortgage interest are the most discussed exceptions, as these are popular with voters and often used.


Hall-Rabushka flat tax

Designed by economists at the Hoover Institution, Hall-Rabushka is a fully developed flat tax on consumption (taxing consumption is thought by economists to be more efficient than taxing income).[6] Loosely speaking, Hall-Rabushka accomplishes this by taxing income and then excluding investment. An individual could file a Hall-Rabushka tax return on a postcard. Robert Hall and Alvin Rabushka have consulted extensively in designing the flat tax systems in Eastern Europe. Hoover Tower at the Hoover Institution The Hoover Institution on War, Revolution, and Peace is a public policy think tank and library founded by Herbert Hoover at Stanford University, his alma mater. ... A consumption tax is a tax on the purchase of a good or service. ... Robert E. Hall is an economist at Stanford with a wide variety of interests. ...


Negative income tax

Main article: Negative income tax

The Negative Income Tax (NIT) which Milton Friedman proposed in his 1962 book Capitalism and Freedom is a type of flat tax. The basic idea is the same as a flat tax with personal deductions, except that when deductions exceed income, the taxable income is allowed to become negative rather than being set to zero. The flat tax rate is then applied to the resulting "negative income," resulting in a "negative income tax" the government owes the household, unlike the usual "positive" income tax, which the household owes the government. In economics, a negative income tax (abbreviated NIT) is a method of tax reform that has been discussed among economists but never fully implemented. ... Milton Friedman (July 31, 1912 – November 16, 2006) was an American Nobel Laureate economist and public intellectual. ... Capitalism and Freedom is a non-fiction book written by Nobel Prize in Economics recipient Milton Friedman. ...


For example, let the flat rate be 20%, and let the deductions be $20,000 per adult and $7,000 per dependent. Under such a system, a family of four making $54,000 a year would owe no tax. A family of four making $74,000 a year would owe tax amounting to 0.2(74,000-54,000) = $4,000, as under a flat tax with deductions. But families of four earning less than $54,000 per year would owe a "negative" amount of tax (that is, it would receive money from the government). E.g., if it earned $34,000 a year, it would receive a check for $4,000.


The NIT is intended to replace not just the USA's income tax, but also many benefits low income American households receive, such as food stamps and Medicaid. The NIT is designed to avoid the welfare trap—effective high marginal tax rates arising from the rules reducing benefits as market income rises. An objection to the NIT is that it is welfare without a work requirement. Those who would owe negative tax would be receiving a form of welfare without having to make a try to obtain employment. Another objection is that the NIT subsidizes industries employing low cost labor, but this objection can also be made against current systems of benefits for the working poor. The Food Stamp Program serves as the first line of defense against hunger. ... Medicaid is the US health insurance program for individuals and families with low incomes and resources. ... The welfare trap is a name for a situation in which taxation and welfare systems create strong incentives for people to stay on social welfare payments. ... Working poor is a term used to describe individuals and families who maintain regular employment but remain in relative poverty due to low levels of pay and dependent expenses. ...


True flat income tax

As per the definition at the beginning of the article, a true flat tax is a system of taxation where one tax rate is applied to all income with no exceptions.


In an article titled The flat-tax revolution, dated April 14, 2005, The Economist argued as follows: If the goals are to reduce corporate welfare and to enable household tax returns to fit on a postcard, then a true flat tax best achieves those goals. The flat rate would be applied to all taxable income and profits without exception or exemption. It could be argued that under such an arrangement, no one is subject to a preferential or "unfair" tax treatment. No industry receives special treatment, large households are not advantaged at the expense of small ones, etc. Moreover, the cost of tax filing for citizens and the cost of tax administration for the government would be further reduced, as under a true flat tax only businesses and the self-employed would need to interact with the tax authorities. The Economist is an English-language weekly news and international affairs publication owned by The Economist Newspaper Ltd and edited in London. ... Corporate welfare is a pejorative term, first coined by Ralph Nader in 1956, describing a governments bestowal of grants and/or tax breaks on corporations or other special favorable treatment from the government. ...


Fairness

This is a hotly debated aspect of flat taxes. Relative fairness hinges crucially on what tax deductions are abolished when a flat tax is introduced, and who profits the most from those deductions.


Proponents of the flat tax claim it is fairer than progressive taxation, since everybody pays the same. Opponents point out first that it might not make sense for everyone to pay the same when some get advantages of prosperity. Also, they note that for the state to raise the same amount of money under a flat rate tax requires that the rich pay less and the poor pay more than they would under a progressive tax system. Proponents respond to this argument by saying that there is no need to raise the tax rate as a flat tax will remove economic disincentives and encourage economic growth leading to higher incomes and, as such, more tax revenues meaning that all taxpayers would be paying at the same or lower rate than their old system. A progressive tax, or graduated tax, is a tax that is larger as a percentage of income for those with larger incomes. ...


The issue comes down to how one defines "fair". Proponents claim that since everybody pays the same rate, it treats everyone equally and thus is fair to everyone. Opponents of the flat tax, on the other hand, claim that since the marginal value of income declines with the amount of income (the last $100 of income of a family living near poverty being considerably more valuable than the last $100 of income of a millionaire), taxing that last $100 of income the same amount despite vast differences in the marginal value of money is unfair. Many flat-tax proponents actually concede this premise since most proposals are not truly totally flat but have a threshold below which income is not taxed at all.[citation needed] Therefore, with the exception of flat-tax proponents who argue for no deductions and taxation of all income at one flat rate, both proponents and opponents agree in principle if not in degree with the basic premise of this concept. Marginalism is the use of marginal concepts within economics. ...


However, the sizable exemptions provided under most flat tax proposals go far in restoring effective progressivity. As income for an individual increases, the exempt income becomes an ever smaller percentage of total income.


The issue of removing deductions, exemptions and special treatments is also relevant to fairness, if those special treatments currently benefit the better off. As an example, the tax debate in the UK has recently (2007) focused on the fact that hedge fund managers, some with multi-million pound incomes, "pay less tax than a cleaning lady"[7] (actually a lower tax rate rather than less tax), because the hedge fund manager's "income" qualifies as capital gains, taxable at 10%, rather than the cleaner's employment income taxable at 33% (22% income tax plus 11% social security charge). A flat tax that taxed both at the same rate is argued to be fairer than the current, supposedly progressive, system.


We must also consider fairness in relation to the broader concept of justice. Proponents argue that a flat tax would: (1) by its greater simplicity, reduce taxes for each person, rich and poor; and (2) by stimulating economic growth, produce more government revenue, directable to programs that benefit the poor. Thus, even if a flat-rate taxation is less fair than graduated taxation as a concept, it could produce more social justice.


Arguments in favor

In addition to the controversy over which kind of tax system is fairest to both high and low income earners, there are other arguments favouring or opposing a flat tax.


Simplicity

A flat tax taxes all income once at its source. Hall and Rabushka (1995) includes a proposed amendment to the US Revenue Code implementing the variant of the flat tax they advocate.[8] This amendment, only a few pages long, would replace hundreds of pages of statutory language (although it is important to note that much statutory language in taxation statutes is not directed at specifying graduated tax rates; see Conflating concepts in Arguments against below). As it now stands, the USA Revenue Code is over 9 million words long and contains many loopholes, deductions, and exemptions which, advocates of flat taxes claim, render the collection of taxes and the enforcement of tax law complicated and inefficient. It is further argued that current tax law retards economic growth by distorting economic incentives, and by allowing, even encouraging, tax avoidance. With a flat tax, there are fewer incentives to create tax shelters and to engage in other forms of tax avoidance.


Under a pure flat tax without deductions, companies could simply, every period, make a single payment to the government covering the flat tax liabilities of their employees and the taxes owed on their business income.[9] For example, suppose that in a given year, ACME earns a profit of $3 million, pays $2 million in salaries, and spends an added $1 million on other expenses the IRS deems to be taxable income, such as stock options, bonuses, and certain executive privileges. Given a flat rate of 15%, ACME would then owe the IRS (3M + 2M + 1M) x0.15 = $900,000. This payment would, in one fell swoop, settle the tax liabilities of ACME's employees as well as taxes it owed by being a firm. Most employees throughout the economy would never need to interact with the IRS, as all tax owed on wages, interest, dividends, royalties, etc. would be withheld at the source. The main exceptions would be employees with incomes from personal ventures. The Economist claims that such a system would reduce the number of entities required to file returns from about 130 million individuals, households, and businesses, as at present, to a mere 8 million businesses and self-employed.


This simplicity would remain even if realized capital gains were subject to the flat tax. In that case, the law would require brokers and mutual funds to calculate the realized capital gain on all sales and redemptions. If there were a gain, 15% of the gain would be withheld and sent to the IRS. If there were a loss, the amount would be reported to the IRS, which would offset gains with losses and settle up with taxpayers at the end of the period.


Economic efficiency

A common approximation in economics is that the economic distortion or excess burden from a tax is proportional to the square of the tax rate.[10] A 20 percent tax rate thus causes four times the excess burden or deadweight loss of a 10 percent tax, since it is twice the rate. Broadly speaking, this means that a low uniform rate on a broad tax base will be more economically efficient than a mix of high and low rates on a smaller tax base. “Taxes” redirects here. ... In economics, a deadweight loss (also known as excess burden) is a permanent loss of well being to society that can occur when equilibrium for a good or service is not Pareto optimal, (that at least one individual could be made better off without others being made worse off). ... There are several measures of economic efficiency: Pareto efficiency Kaldor-Hicks efficiency X-efficiency Allocative efficiency For applications of these principles see: Efficient market hypothesis Welfare economics Production theory basics See also Business efficiency Inefficiency ...


Elimination of other taxes

Some flat tax plans, such as that proposed by U.S. Rep. Dick Armey in the early 1990s, include the elimination of taxation on income from dividends on corporate stock and realized capital gains. Instead, individuals would be taxed only on wages, salary, and pensions, while businesses would be taxed on net income.[11] A dividend is the distribution of profits to a companys shareholders. ... In finance, a capital gain is profit that results from the appreciation of a capital asset over its purchase price. ...


A flat tax might also serve as a substitute for taxes of Social Security benefits, if FICA tax liabilities are not a deductible expense for employers. It may also enable the reduction or elimination of estate or bequest taxes, though income tax reform does not necessarily entail the reform of other types of taxes. Social Security, in the United States, currently refers to the Federal Old-Age, Survivors, and Disability Insurance (OASDI) program. ... Federal Insurance Contributions Act (FICA) tax is a United States tax levied in an equal amount on employees and employers to fund federal programs for retirees, disabled, and children of deceased workers. ... Inheritance tax, also known in some countries outside the United States as a death duty and referred to as an estate tax within the U.S, is a form of tax levied upon the bequest that a person may make in their will to a living person or organisation. ...


Increased tax revenues

Some claim the flat tax will increase tax revenues, by simplifying the tax code and removing the many loopholes corporations and the rich currently exploit to pay less tax. The Russian Federation is a claimed case in point; the real revenues from its Personal Income Tax rose by 25.2% in the first year after the Federation introduced a flat tax, followed by a 24.6% increase in the second year, and a 15.2% increase in the third year.[12] The Laffer curve predicts such an outcome, but attributes the primary reason for the greater revenue to higher levels of economic growth. The Russian example is often used as proof of this, although an IMF study in 2006 found that there was no sign "of Laffer-type behavioral responses generating revenue increases from the tax cut elements of these reforms" in Russia or in other countries.[13] This article does not cite any references or sources. ...


Minor matters

Under a flat tax, the government's cost of processing tax returns would become much smaller, and the relevant tax bodies could be abolished or massively downsized. The people freed from working in administering taxes will then be employed in jobs that are more productive. If combined with a provision to allow for negative taxation, the flat tax itself can be implemented in an even simpler way. In addition, such a tax reduces the cost of welfare administration significantly.[citation needed] In economics, a negative income tax (abbreviated NIT) is a method of tax reform that has been discussed among economists but never fully implemented. ...


It is also argued that a flat tax will help lessen outsourcing, a growing problem in recent years[citation needed], because under a flat tax, businesses will be able to pay taxes more easily and to deal with fewer regulations.


The effect of a shift to flat taxation on charitable giving is unclear. Those whose after-tax incomes will rise under a flat tax may give more. On the other hand, the net of tax "price" of donating to charity will rise, which would discourage giving. A survey ranked tax deductibility #7 among the reasons people give for donating money to worthy causes.[citation needed]


Arguments against

Overall tax structure

Some taxes other than the income tax (for example, taxes on sales and payrolls) tend to be regressive. Hence, making the income tax flat could result in a regressive overall tax structure. Under such a structure, those with lower incomes tend to pay a higher proportion of their income in total taxes than the affluent do. The fraction of household income that is a return to capital (dividends, interest, royalties, profits of unincorporated businesses) is positively correlated with total household income[citation needed]. Hence a flat tax limited to wages would seem to leave the wealthy better off. However, some recently proposed systems would utilize a sales tax rate rather than wages, making this argument fairly moot. Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        A regressive tax is a tax imposed so that the tax... Throughout this article, the unqualified term dollar and the $ symbol refer to the United States dollar. ...


Conflating Concepts

It is invariably argued that a flat tax will greatly simplify tax compliance and administration. In fact, simplicity does not so much stem from the structure of tax rates (a progressive rate structure is nothing more than a look-up table filling at most one page) as from the definition of what is subject to tax. Tax simplification - getting rid of all the deductions, exemptions, and special rules added over the years - is an issue wholly separable from that of the rate structure. A nation can vastly simplify its tax code while keeping its rate structure progressive.


Ensuring simplification

It is possible that a flat tax would not remain simple over time, given the realities of interest group politics. While all flat tax proposals propose to eliminate nearly all deductions and credits, some envision keeping the mortgage interest deduction and possibly some others (note that Hall and Rabushka 1995 do not).[citation needed]


Influence on particular investments

Through tax deductions and credits, the government can stimulate investments in activities it deems worthy, for example, renewable energies or developing improved stealth bombers. Under a flat tax without deductions, the government loses this option.


Border adjustable

A flat tax system and income taxes overall are not border-adjustable; meaning the tax component embedded into products via taxes imposed on companies (including corporate taxes and payroll taxes) can not be removed when exported to a foreign country (see Effect of taxes and subsidies on price). Taxation systems such as a national sales tax or value added tax remove the tax component when goods are exported and apply the tax component on imports. Under a flat tax, domestic products are at a disadvantage to foreign products (at home and abroad). Such a system greatly impacts the global competitiveness of a country. For example, the United States is the only one of 30 OECD countries with no border adjustment element in its tax system.[14] Due to this tax structure, it is estimated that U.S. goods are at a 17% competitive disadvantage, on average, to foreign producers.[15] Though, it's possible that this argument falls under the Conflating Concepts category since a flat tax system with border adjustments could be implemented as easily as one without. Corporate tax refers to a direct tax levied by various jurisdictions on the profits made by companies or associations. ... This article is the current Taxation Collaboration of the Month. ... Taxes and subsidies have the effect of shifting the quantity and price of goods. ... Throughout this article, the unqualified term dollar and the $ symbol refer to the United States dollar. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic... The Organization for Economic Co-operation and Development (OECD) is an international organization of those developed countries that accept the principles of representative democracy and a free market economy. ...


Race to the bottom

Main article: Race to the bottom

An argument raised by opponents of the flat tax is that corporations or wealthy persons might move to countries with lower taxes, especially in a single country context. The argument states that this would lead to a race to the bottom in which countries compete to offer ever-lower taxes for the rich, so that the rich become even richer, while the poor and middle classes, unable to financially handle relocation to another country, are left to shoulder the entire cost of all government services.[citation needed] A consequence would be an ever-worsening under-funding and neglect of the public sector.[citation needed] Proponents might respond to that argument by questioning if the wealthy would relocate to pay less in taxes. More fundamentally, it is hard to see how that this is a criticism of the flat tax per se, as the same principle may apply under any tax system. The only sure remedy would be a universal tax system, a solution few would find acceptable. In government regulation, a race to the bottom is a theoretical phenomenon which occurs when competition between nations or states (over investment capital, for example) leads to the progressive dismantling of regulatory standards. ...


Opponents of the flat tax argue that the end result of this race to the bottom is social disintegration (see also failed state), a situation from which even the richest cannot benefit. It is argued that in order to prevent this it is the responsibility of local and national governments everywhere to ensure that the rich pay a fair share of the tax burden.[citation needed] Concepts such as flat rate taxes are therefore said to be irresponsible at a global level, even if they may seem to grant a temporary advantage at a national level. In other words, making economic conditions too desirable in one country may have the effect of forcing other countries to compete by making their conditions equally desirable. For Noam Chomskys 2006 book, see Failed States (book). ...


Inequality

Social democrats in particular oppose flat tax plans since they believe it weakens the redistributive effect of progressive taxation.[citation needed] Irrespective of economic growth,[citation needed] a rise in inequality is seen as undesirable in developed nations as it is linked to poorer health, higher crime and more social unrest (See economic inequality). Since the health of a population, for instance, takes many years to respond to economic realities, the negative effects of a flat tax may not be immediately observable. Differences in national income equality around the world as measured by the national Gini coefficient. ...


However, proponents argue that this does not consider the effects of the sizable exemptions included in most flat tax proposals. Further it is possible to envision a scenario in which all parties are better off under a flat tax than without, despite inequality; in this case, according to utility theory, the flat tax scenario dominates the status quo (meaning it is preferred in all cases); the 'inequity' becomes a mere abstract consideration, as contrasted with the tangible economic benefit achieved by each individual. This assumes, of course, that there is not some third alternative which benefits each individual in a more equitable way.


Flat taxation effects in Eastern Europe

Flat tax in Europe
Flat tax in Europe

Advocates of the flat tax argue that the former-Communist states of Eastern Europe have benefited from the adoption of a flat tax. Some of these nations, particularly the Baltic countries, have experienced exceptional economic growth in recent years. There is a growing concern, however, that the effect that flat rates of taxation are having on these countries, both socially and politically, and some economists argue that flat tax has had less influence on economic growth than previously thought. This article is about a form of government in which the state operates under the control of a Communist Party. ... Statistical regions of Europe as delineated by the United Nations (UN definition of Eastern Europe marked red):  Northern Europe  Western Europe  Eastern Europe  Southern Europe Pre-1989 division between the West (grey) and Eastern Bloc (orange) superimposed on current borders: Russia (dark orange), other countries formerly part of the USSR... The three Baltic states: Estonia, Latvia, and Lithuania The terms Baltic countries, Baltic Sea countries, Baltic states, and Balticum refer to slightly different combinations of countries in the general area surrounding the Baltic Sea. ... A glass skyscraper – an icon of Estonias economic boom Baltic Tiger is a term used to refer to any of the three Baltic states – Estonia, Latvia and Lithuania – during their periods of economic boom, which started after the year 2000 and continues up to the present moment. ...

  • Lithuania, which levies a flat tax rate of 24% (previously 27%) on its citizens, has experienced amongst the fastest growth in Europe. Advocates of flat tax speak of this country's declining unemployment and rising standard of living. They also state that tax revenues have increased following the adoption of the flat tax, due to a subsequent decline in tax evasion and the Laffer curve effect. Others point out, however, that Lithuanian unemployment is falling at least partly as a result of mass emigration to Western Europe. The argument is that Lithuania's comparatively very low wages, on which a regressive flat tax regime is levied, combined with the possibility now to work legally in Western Europe since accession to the European Union, is forcing people to leave the country en masse. The Ministry of Labour estimated in 2004 that as many as 360,000 workers may have left the country by the end of that year, a prediction that is now thought to have been broadly accurate. The impact is already evident: in September 2004, the Lithuanian Trucking Association reported a shortage of 3,000-4,000 truck drivers. Large retail stores have also reported some difficulty in filling positions.[16] However, the emigration trend has recently stopped as enormous real wage gains in Lithuania have caused a return of many migrants from Western Europe. In addition to that, it is clear that countries not levying a flat tax rates such as Poland also temporarily faced large waves of emigration after EU membership in 2004.
  • Whilst in most countries the introduction of a flat tax has coincided with strong increases in growth and tax revenue, there is no proven causal link between the two. For example, it is also possible that both are due to a third factor, such as new government that may institute other reforms along with the flat tax. A study by the IMF showed that sharp increases in Russian GDP growth and tax revenue around the time of the introduction of a 13% flat tax were not the result of the tax reform, but of a sharp increase in oil prices, strong real wage growth, and intensification in the prosecution of tax evasion.[17]
  • In Estonia, which has had a 26% (24% in 2005, 23% in 2006, 22% in 2007, 21% in 2008, planned 20% in 2009, 19% in 2010, 18% in 2011) flat tax rate since 1994, studies have shown that the significant increase in tax revenue experienced was caused partly by a disproportionately rising VAT revenue.[18] Moreover, Estonia and Slovakia have high social contributions, pegged to wage levels.[18] Both matters raise questions regarding the justice of the flat tax system, and thus its long-term viability. The Estonian economist and former chairman of his country's parliamentary budget committee Olev Raju, stated in September 2005 that "income disparities are rising and calls for a progressive system of taxation are getting louder - this could put an end to the flat tax after the next election" [35].

CIA figures for world unemployment rates, 2006 Unemployment is the state in which a person is without work, available to work, and is currently seeking work. ... This article does not cite any references or sources. ... A current understanding of Western Europe. ... The European Union (EU) was created by six founding states in 1957 (following the earlier establishment by the same six states of the European Coal and Steel Community in 1952) and has grown to 27 member states. ... The term real wages refer to wages that have been adjusted for inflation. ... The flag of the International Monetary Fund (IMF) The International Monetary Fund (IMF) is the international organization entrusted with overseeing the global financial system by monitoring foreign exchange rates and balance of payments, as well as offering technical and financial assistance when asked. ... The term real wages refer to wages that have been adjusted for inflation. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic...

Countries that have flat tax systems

These are countries, as well as minor jurisdictions with the autonomous power to tax, that have adopted tax systems that are commonly described in the media and the professional economics literature as a flat tax.


  • Flag of Iceland Iceland [28] [26] [29] Iceland's system differs from the Hall-Rabushka flat tax by taxing investment income and allowing numerous exceptions.[30]
  • Flag of Iraq Iraq [31] [32] [33] It is not clear how effectively the Iraqi tax is being collected in practice.

Also: Image File history File links Flag_of_Bulgaria. ... Image File history File links Flag_of_Albania. ... Image File history File links Flag_of_Estonia. ... Image File history File links Flag_of_Georgia. ... Image File history File links Flag_of_Guernsey. ... Image File history File links Flag_of_Kazakhstan. ... Image File history File links Flag_of_Iceland. ... Image File history File links Flag_of_Iraq. ... Image File history File links Flag_of_Jersey. ... Image File history File links Flag_of_Kyrgyzstan. ... Image File history File links Flag_of_Latvia. ... Image File history File links Flag_of_Lithuania. ... Image File history File links Flag_of_Macedonia. ... Image File history File links Flag_of_Mongolia. ... Image File history File links Flag_of_Montenegro. ... This article is about the country in Europe. ... Image File history File links Flag_of_Mauritius. ... Image File history File links Flag_of_Romania. ... Image File history File links Flag_of_Russia. ... Image File history File links Flag_of_Serbia. ... Not to be confused with Republika Srpska. ... Image File history File links Flag_of_Slovakia. ... Image File history File links Flag_of_Ukraine. ...

  • Transnistria, also known as Transnistrian Moldova or Pridnestrovie. [41] This is a disputed territory, but the authority that seems to have de facto government power in the area claims to levy a flat tax.

Countries that have no income tax

Not having income tax can be considered as an example of a flat tax, with a rate of 0%. There are countries that have no income tax. Some of these countries have alternative sources of income (often natural resources), while others (such as Somalia) lack a government apparatus to effectively collect taxes. For the region during the Second World War, see Transnistria (World War II). ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        An income tax is a tax levied on the financial income...

Countries reputed to have a flat tax

  • Flag of Hong Kong Hong Kong Some sources claim that Hong Kong has a flat tax,[42] though its salary tax structure has several different rates ranging from 2% to 20% after deductions. Taxes are capped at 16% of gross income, so this rate is applied to upper income returns if taxes would exceed 16% of gross otherwise.[43] Accordingly, Duncan B. Black of Media Matters for America, says "Hong Kong's 'flat tax' is better described as an 'alternative maximum tax.'" [44] Alan Reynolds of the Cato Institute similarly notes that Hong Kong's "tax on salaries is not flat but steeply progressive."[45] Hong Kong has, nevertheless, a flat profit tax regime.

Countries considering a flat tax system

These are countries where concrete flat tax proposals are currently being considered by influential politicians or political parties. Image File history File links Flag_of_Hong_Kong. ...

  • Flag of the Czech Republic Czech Republic[46]
  • Flag of Hungary Hungary[citation needed]
  • Flag of Poland Poland In 2007 elections, the Civic Platform gained 41.5% of the votes, running on a 15% flat tax as one of the main points in the party program.[47]
  • Flag of Greece Greece There are some articles from 2005 indicating that the Greek government considered a flat tax. If it is still on the table, it apparently hasn't passed yet as of February 2008.[48][49]

See also

Economic Concepts Image File history File links Flag_of_the_Czech_Republic. ... Image File history File links Flag_of_Hungary. ... Image File history File links Flag_of_Poland. ... Civic Platform (Platforma Obywatelska, PO), is a Christian-democratic and liberal-conservative Polish political party. ... Image File history File links Flag_of_Greece. ...

Tax Systems Fiscal drag refers to the increase in tax revenue caused when the threshold of a tax is not increased in line with inflation. ... To meet Wikipedias quality standards, this article or section may require cleanup. ...

Notes

  1. ^ Flat-Tax Comeback Bruce Bartlett, National Review, November 10, 2003
  2. ^ Cameron is no moderate, Neil Clark, The Guardian October 24, 2005
  3. ^ Albanian government to implement flat tax (SETimes.com)
  4. ^ Gordon Brown's speech to the Labour party conference September 26, 2005
  5. ^ The Armey Flat Tax, National Center for Policy Analysis
  6. ^ Hoover Institution - Books - The Flat Tax
  7. ^ "SVG chairman breaks tax taboo", Financial Times, London, 3rd June 2007 ([1])
  8. ^ Hoover Institution - Books - The Flat Tax
  9. ^ Simpler taxes | The flat-tax revolution | Economist.com
  10. ^ Louis Kaplow. "Accuracy, Complexity, and the Income Tax," Journal of Law, Economics, and Organization (1998), V14 N1, p.68.[2]
  11. ^ Daniel J. Mitchell. "The Global Flat Tax Revolution," Cato Policy Report July/August 2007. [3]
  12. ^ The Flat Tax at Work in Russia: Year Three, Alvin Rabushka, Hoover Institution Public Policy Inquiry, www.russianeconomy.org, April 26, 2004
  13. ^ The "Flat Tax(es)": Principles and Evidence
  14. ^ Linbeck, Leo (2006-06-22). Testimony Before the Subcommittee on Select Revenue Measures. House Committee on Ways and Means. Retrieved on 2006-08-11.
  15. ^ FairTax Frequently Asked Questions. Americans For Fair Taxation. Retrieved on 2006-11-14.
  16. ^ http://www.state.gov/e/eb/ifd/2005/42068.htm
  17. ^ IMF Survey: February 21, 2005
  18. ^ a b Niedrige Steuer für alle: Osteuropa: Einige Länder haben die Einheitssteuer. Doch sie ist umstritten | ZEIT online
  19. ^ The Associated Press. "Bulgarian parliament approves 2008 budget that foresees record 3 percent surplus". [4]
  20. ^ Daniel Mitchell. "Albania Joins the Flat Tax Club." Cato at Liberty, April 9, 2007. [5]
  21. ^ Jonilda Koci. "Albanian government approves 10% flat tax". Southeast European Times, June 4, 2007. [6]
  22. ^ Alvin Rabushka. "Estonia Plans to Reduce its Flat-Tax Rate." March 26, 2007. [7]
  23. ^ Toby Harnden. "Pioneer of the 'flat tax' taught the East to thrive." Telegraph, April 9, 2005.[8]
  24. ^ a b c d e f g h Michael Keen, Yitae Kim, and Ricardo Varsano. "The 'Flat Tax(es)': Principles and Evidence." IMF Working Paper WP/06/218.[9]
  25. ^ Alvin Rabushka. "The Flat Tax Spreads to Georgia." January 3, 2005.[10]
  26. ^ a b c d e Alvin Rabushka. "Flat and Flatter Taxes Continue to Spread Around the Globe." January 16, 2007.[11]
  27. ^ The Economist Intelligence Unit, Kazakhstan fact sheet. "In 2007 Kazakhstan introduced several changes to the taxation system. The flat-rate VAT on all goods was reduced from 15% to 14%, and a flat rate of income tax of 10% was introduced, in place of the previous progressive range of 5-20%." [12]
  28. ^ Daniel Mitchell. "Iceland Comes in From the Cold With Flat Tax Revolution." March 27, 2007.[13]
  29. ^ The Globe and Mail, as quoted on Cato-at-liberty by Daniel Mitchell: "Effective this year, Iceland (population: 300,000) taxes all personal income at a flat rate of 32 per cent — which appears high because it includes municipal as well as national taxes." [14]
  30. ^ Daniel Mitchell. "Iceland Joins the Flat Tax Club." Cato Tax and Budget Bulletin, February 2007. [15]
  31. ^ Daniel Mitchell. "If a Flat Tax is Good for Iraq, How About America?" Heritage foundation, November 10, 2003. [16].
  32. ^ Alvin Rabushka. "The Flat Tax in Iraq: Much Ado About Nothing—So Far." May 6, 2004. [17]
  33. ^ Noam Chomsky. "Transfer real sovereignty." znet, May 11, 2004. [18]
  34. ^ Alvin Rabushka. "A Competitive Flat Tax Spreads to Lithuania." November 2, 2005.[19]
  35. ^ "The lowest flat corporate and personal income tax rates." Invest Macedonia government web site. Retrieved June 6, 2007. [20]
  36. ^ Alvin Rabushka. "The Flat Tax Spreads to Mongolia." January 30, 2007.[21]
  37. ^ Alvin Rabushka. "The Flat Tax Spreads to Montenegro." April 13, 2007. [22]
  38. ^ Alvin Rabushka. "Russia adopts 13% flat tax." July 26, 2000.[23]
  39. ^ Alvin Rabushka. "The Flat Tax Spreads to Serbia." March 23, 2004.[24]
  40. ^ Alvin Rabushka. "The Flat Tax Spreads to Ukraine." May 27, 2003.[25]
  41. ^ Transnistrian government web site. [26]
  42. ^ Daniel Mitchell. "Fixing a Broken Tax System with a Flat Tax." Capitalism Magazine, April 23, 2004.[27]
  43. ^ Duncan B. Black. "Hyman falsely claimed Hong Kong imposes flat tax on income," Media Matters, Jan 27, 2005. [28]
  44. ^ Duncan B. Black. "Fund wrong on Hong Kong 'flat tax'." Media Matters, Feb 28, 2005. [29]
  45. ^ Alan Reynolds. "Hong Kong's Excellent Taxes." townhall.com, but the column was syndicated. June 6, 2005. [30]
  46. ^ Ulrika Lomas. "Czech Flat Tax Now A Certainty, Says PM." tax-news.com, 27 March 2007. [31]
  47. ^ "Poland brings in flat tax", Adam Smith Institute
  48. ^ Greece joins the flat rate tax bandwagon. By George Trefgarne, Economics Editor. The Telegraph. 2005. [32]
  49. ^ "Flat tax rate on the cards." Kathimerini. Date unclear. [33]

References

  • Steve Forbes, 2005. Flat Tax Revolution. Washington: Regnery Publishing. ISBN 0-89526-040-9
  • Robert Hall and Alvin Rabushka, 1995 (1985). The Flat Tax. Hoover Institution Press.
  • Anthony J. Evans, "Ideas and Interests: The Flat Tax" Open Republic 1(1), 2005

External links

Wikiquote has a collection of quotations related to:
Taxation
  • The Laffer Curve: Past, Present and Future: A detailed examination of the theory behind the Laffer curve, and many case studies of tax cuts on government revenue in the United States
  • Podcast of Rabushka discussing the flat tax Alvin Rabushka discusses the flat tax with Russ Roberts on EconTalk.
A consumption tax is a tax on the purchase of a good or service. ... Throughout this article, the unqualified term dollar and the $ symbol refer to the United States dollar. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        An income tax is a tax levied on the financial income... In economics, a negative income tax (abbreviated NIT) is a method of tax reform that has been discussed among economists but never fully implemented. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        A progressive tax is a tax imposed so that the effective... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        A regressive tax is a tax imposed so that the tax... A sales tax is a consumption tax charged at the point of purchase for certain goods and services. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Gold standard Fiscal policy Spending   Deficit   Debt Policy-mix Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Regulation Banking Fractional-reserve Full-reserve   Free banking Islamic... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... is the 173rd day of the year (174th in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... is the 223rd day of the year (224th in leap years) in the Gregorian calendar. ... Year 2006 (MMVI) was a common year starting on Sunday of the Gregorian calendar. ... is the 318th day of the year (319th in leap years) in the Gregorian calendar. ... The Globe and Mail is a large Canadian English language national newspaper based in Toronto. ... For the boxer, see Stephen Forbes. ... Robert E. Hall is an economist at Stanford with a wide variety of interests. ... Image File history File links This is a lossless scalable vector image. ... Wikiquote is one of a family of wiki-based projects run by the Wikimedia Foundation, running on MediaWiki software. ... EconTalk is a weekly podcast hosted by professor Russell Roberts at George Mason University. ...

  Results from FactBites:
 
A Brief Guide to the Flat Tax (3544 words)
Flat tax proposals would eliminate the tax code’s bias against capital formation by ending the double taxation of income that is saved and invested.
The Estonian flat tax is now down to 24 percent and will drop to 20 percent by 2007, and Lithuania is in the process of lowering its 33 percent flat tax to a more reasonable 24 percent.
Furthermore, since the family-based allowance under a flat tax is twice as high for a mar­ried couple as it is for those filing singly, that part of the marriage penalty also disappears.
  More results at FactBites »

 
 

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