March 25, 2021, is the fortieth anniversary of the beginning of the flat tax movement. I include an op-ed that was published on March 25, 1981, in the Wall Street Journal. I wrote it four months after Ronald Reagan’s Tax Policy Task Force submitted its report upon his election. My motivation for the op-ed was that while the Task Force’s recommendations, which were largely adopted, improved the then current federal income tax code, they did not go nearly far enough to simplify and fix other flaws in the tax code.
My WSJ article can be read on my website: alvinrabushka.com. Click on the toolbar button for Articles and Essays. It is the first entry under the heading Wall Street Journal.
After its publication, Bob Hall and I collaborated during summer 1981 to write a flat tax plan. On December 10, 1981, we published it in the Wall Street Journal. (Second entry under WSJ heading on my website.). That article presented the Hall-Rabushka “flax tax on a postcard.”
Hall-Rabushka is a fully-integrated, progressive, single-rate consumption tax. Progressivity occurs in the wages and salaries component by way of personal allowances.
6 comments:
The plan was elegant and compelling when I first read it 40 years ago, and remains so. Unfortunately, members of Congress seem even less likely to embrace an efficient and minimally distorting tax measure than they were in 1981. But hope springs eternal. Best wishes!
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Alvin, your post marking the 40th anniversary of the flat tax movement is both enlightening and timely. Reflecting on the origins of the Hall-Rabushka flat tax proposal and its enduring relevance underscores the importance of tax reform discussions. Your insights into simplifying the tax code continue to inspire meaningful dialogue in fiscal policy circles.
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I am trying to self-publish a book in concert with a GitHub repository with recommendations for legislative and Constitutional reform in the USA. I believe there will be a once-in-a-lifetime opportunity over the next 3 years to queue up serious, actual changes.
I would like to propose much of the legislative language of your proposal -- now only available on the WayBack Machine, and from your book, which I own. https://web.archive.org/web/20150906115058/http://www.hoover.org/sites/default/files/flat_tax_appendix.pdf
I think your original proposal is more elegant and straightforward than the other versions introduced by Arlen Specter, Richard Armey, Michael Burgess, et. Al, in the 107th, 108th, 109th, 111th, 117th and 118th US congresses. You mention in the forward several others, and I’ll try to look those up.
But because I’m not sure your original legal language is intended to be in the public domain…
I would like to know if you can deed your original proposed language to be available under a Creative Commons License, preferably 4.0 BY. (Link here: https://creativecommons.org/licenses/by/4.0/deed.en)
Without that, I can’t be sure of getting enough public engagement.
Full disclosure, I will be adding language to have the IRS dispense a Universal Basic Income which will adjust annually based on increases or decreases in the GDP, and to have the IRS calculate an annual adjustment to the Flat Tax Rate to nudge it 1% annually toward a level that will maintain a Target Level for US Debt-to-GDP.
Thank you very much for your work over the years on this. Perhaps the thirtieth year since Second Edition, the umpteenth time, is the charm?
(Currently, I’m going to crib through the previous legislative proposals, but I would really prefer to use your language.)
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