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The Hall–Rabushka flat tax is a fully developed flat tax on consumption designed by American economists Robert Hall and Alvin Rabushka at the Hoover Institution. 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. The Hall–Rabushka flat tax may include an exemption, which allows the tax to preserve progressivity.
In the United States, extensive tax reform has not taken place since the Tax Reform Act of 1986, and like other tax reform, the flat tax has not advanced far in the U.S. political process. However, Eastern Europe has enthusiastically embraced the flat tax after the fall of the Iron Curtain. Hall and Rabushka have consulted extensively in designing these flat taxes.
- ^ Hall, Robert E. and Rabushka, Alvin. The Flat Tax. Hoover Institution Press, 2007, p. vii