Living With the Flat Tax

Feld, Alan L.

doi:10.1086/ntj41789175

Cited by 6 publications

(1 citation statement)

References 4 publications

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“…Pechman ,1990). Therefore, one could argue that these proposals are 'Americainspired' (Feld, 1995), since they offer an alternative for both the current income tax and for the value added tax (there is no VAT in the USA).…”

Section: Do We Need a Flat Tax?mentioning

confidence: 99%

Does A Flat Rate Individual Income Tax Reduce Tax Progressivity? A Simulation for the Netherlands

Caminada,

Goudswaard

2001

Public Finance and Management

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Throughout the last couple of decades the individual income tax systems of most industrialized countries have been (repeatedly) the subject of considerable reform efforts. Although the reform packages vary to a wide extent across countries, the direction of change is roughly similar. Most tax reforms are characterized by base broadening, reduction of tax rates, flattening of the rate structure, and lower tax to GDP-ratios. Implementing a flat rate individual income tax seems to be in line with these reforms, although several steps further along. In this paper, we construct a flat rate/broad base individual income tax system and we compare the distribution of the current personal income tax in the Netherlands to the distribution of the simulated flat rate tax. Using extended data, the effects are simulated of eliminating deductions in exchange for a reduction in tax rates, sufficient to keep personal income tax revenue constant. Our simulations indicate that: ■ After drastic base broadening, a proportional rate of 27.7% balances the budget (ex ante). Such a flat rate causes only relatively small changes in average tax ratios. ■ Overall tax progressivity is mainly caused by the fixed personal exemption, which we maintained in the simulated flat rate tax. We calculated only a 6 percent lower income elasticity in the flat rate system; the concentration (Gini) index of taxes indicates a modest 4 percent decline in progressivity.

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Section: Do We Need a Flat Tax?mentioning

confidence: 99%

Does A Flat Rate Individual Income Tax Reduce Tax Progressivity? A Simulation for the Netherlands

Caminada,

Goudswaard

2001

Public Finance and Management

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The Role of Administrative Issues in Tax Reform: Simplicity, Compliance, and Administration

Gale¹,

Holtzblatt²

2002

United States Tax Reform in the 21st Century

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Zodrow for helpful comments. We thank Henry Aaron and Samara Potter for extraordinarily helpful comments on the penultimate draft of this paper. We also thank Jim Sly for research assistance. Views and opinions expressed in this paper are those of the authors and do not necessarily represent the policies or positions of the Treasury Department or the staff, officers, or trustees of the Brookings Institution.

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Flat Taxes and Effective Tax Planning

Calegari¹

1998

National Tax Journal

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Stiglitz (1985) shows that income deferral opportunities and differentially taxed economic activities provide incentives for investors to engage in tax avoidance strategies. In this paper, I describe several tax avoidance strategies that can be used by taxpayers in a Hall-Rabushka flat tax system to reduce or eliminate their tax liabilities. Effective tax planning continues to be viable in a flat tax regime because the idealized environment envisioned by the proposal does not consider taxpayers' strategic response to the new system. These tax planning techniques can affect economic behavior, compliance and enforcement costs, and the distribution of the tax burden.

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Living With the Flat Tax

Cited by 6 publications

References 4 publications

Does A Flat Rate Individual Income Tax Reduce Tax Progressivity? A Simulation for the Netherlands

Does A Flat Rate Individual Income Tax Reduce Tax Progressivity? A Simulation for the Netherlands

The Role of Administrative Issues in Tax Reform: Simplicity, Compliance, and Administration

Flat Taxes and Effective Tax Planning

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