The Hall–Rabushka flat tax is a
flat tax
A flat tax (short for flat-rate tax) is a tax with a single rate on the taxable amount, after accounting for any deductions or exemptions from the tax base. It is not necessarily a fully proportional tax. Implementations are often progress ...
proposal on consumption designed by American economists
Robert Hall and
Alvin Rabushka at the
Hoover Institution
The Hoover Institution (officially The Hoover Institution on War, Revolution, and Peace; abbreviated as Hoover) is an American public policy think tank and research institution that promotes personal and economic liberty, free enterprise, a ...
. The Hall–Rabushka flat tax involves
taxing income but excluding
investment
Investment is the dedication of money to purchase of an asset to attain an increase in value over a period of time. Investment requires a sacrifice of some present asset, such as time, money, or effort.
In finance, the purpose of investing is ...
. The Hall–Rabushka flat tax may include an exemption, which allows the tax to preserve
progressivity.
In the
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country Continental United States, primarily located in North America. It consists of 50 U.S. state, states, a Washington, D.C., ...
, extensive
tax reform
Tax reform is the process of changing the way taxes are collected or managed by the government and is usually undertaken to improve tax administration or to provide economic or social benefits. Tax reform can include reducing the level of taxati ...
has not taken place since the
Tax Reform Act of 1986
The Tax Reform Act of 1986 (TRA) was passed by the 99th United States Congress and signed into law by President Ronald Reagan on October 22, 1986.
The Tax Reform Act of 1986 was the top domestic priority of President Reagan's second term. The ...
, and like other tax reform, the flat tax has not advanced far in the US political process. However,
Eastern Bloc
The Eastern Bloc, also known as the Communist Bloc and the Soviet Bloc, was the group of socialist states of Central and Eastern Europe, East Asia, Southeast Asia, Africa, and Latin America under the influence of the Soviet Union that existed du ...
countries have generally embraced the flat tax after
the fall of the Iron Curtain. Hall and Rabushka have consulted extensively in designing flat taxes.
Carly Fiorina
Cara Carleton "Carly" Fiorina (''née'' Sneed; born September 6, 1954) is an American businesswoman and politician, known primarily for her tenure as CEO of Hewlett-Packard (HP). As chief executive officer of HP from 1999 to 2005, Fiorina was ...
threw her public support in 2015 behind a 3-page tax plan that is largely based on this tax plan.
CNN Money
CNN Business (formerly CNN Money) is a financial news and information website, operated by CNN. The website was originally formed as a joint venture between CNN.com and Time Warner's ''Fortune'' and ''Money'' magazines. Since the spin-off of Tim ...
believes that Fiorina's plan will include a 19% flat tax for individuals and businesses' operating incomes.
[CNNMoney (New York]
"Carly Fiorina wants a 3-page tax code"
CNN Money, 2015i
See also
References
Tax reform
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