What is the flat tax? Q.What is the flat tax? A.While any tax system with flat rates could be called a flat tax, the name is usually reserved for a system developed by Robert Hall and Alvin Rabushka in 1985. Their flat tax is really a two-part VAT: All value added except wages is taxed at the business level and wages are taxed at the individual level at the same flat rate but with an exemption related to family size. Read more about What is the flat tax?
What policy reforms could simplify the tax code? Q.What policy reforms could simplify the tax code? A.Reducing the number of distinctions among economic activities and taxpayers’ characteristics would simplify the code, reducing both taxpayers’ compliance costs and governmental administrative costs. Some distinctions among taxpayers promote fairness, so there are trade-offs among goals, but the tax law could be simplified without compromising equity. Read more about What policy reforms could simplify the tax code?
What are the benefits of simpler taxes? Q.What are the benefits of simpler taxes? A.Simpler taxes have lower compliance costs—in both time and money—and may encourage taxpayers to use tax provisions aimed at helping people pay for socially desirable activities. Read more about What are the benefits of simpler taxes?
