Growth Effects of Shifting from a Graduated-rate Tax System to a Flat Tax

There is a great deal of dissatisfaction with the existing tax system. Prior research has found that self-interest, perceived equity, persuasive messages, tax knowledge, and demographic factors affect taxpayer attitudes. This study contributes to that body of research by examining the effects of another factor that is associated with taxpayer attitudes: their political affiliation. Data obtained from a national telephone survey of homeowners' attitudes toward alternative tax systems are used. Results indicate that political affiliation plays a significant role in taxpayers' attitudes toward both alternative tax systems in general and the proposed flat tax in particular. Specifically, when faced with the choice of alternative tax systems, respondents who identified themselves as having Republican (Democratic, Independent) political af-filiations were more (less) likely to prefer both the flat tax and the sales tax systems over the current system.

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Growth Effects of a Flat Tax

10.24148/wp2000-15 ◽

2000 ◽

pp. 1.000-32.000 ◽

Cited By ~ 2

Author(s):

Steven P. Cassou ◽

◽

Kevin J. Lansing ◽

Keyword(s):

Flat Tax ◽

Growth Effects

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Flat tax system and heterogeneity of self-employment

Journal of Entrepreneurship in Emerging Economies ◽

10.1108/jeee-06-2020-0175 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Sherzodbek Safarov ◽

Dilnovoz Abdurazzakova

Keyword(s):

Logit Model ◽

Occupational Choice ◽

Second Step ◽

Tax System ◽

Flat Tax ◽

Content Type ◽

Self Employment ◽

Dependent Variables ◽

Wage Employment ◽

Number Of Individuals

Purpose This paper aims to investigate the effect of the flat tax system on self-employment by necessity and by opportunity. Specifically, the paper examines whether individuals decide to switch from wage-employment to self-employment by necessity or by opportunity when government imposes a flat tax system. Design/methodology/approach To analyze the association of a flat tax system with occupational choice this paper uses both multinomial and ordinary logit models. In the multi-nominal logit model, this study separates dependent variables into three categories: wage employee, self-employed by necessity and self-employed by opportunity. In the second step of analyzes using the ordinary logit model, this paper studies only self-employed individuals by distinguishing them according to their preferences. Findings The results suggest that, in countries with the imposed flat tax system, the probability of being self-employed by necessity is low, while the probability of being self-employed by opportunity is high. Moreover, better economic growth in the country also elevates the chances of individuals to be self-employed by opportunity. Originality/value Out novel contribution is documenting that flat tax system in transition countries increases the number of individuals self-employed by opportunity compared to self-employed by necessity.

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Neoliberalism, crisis and authoritarian–ethnicist reaction: The ascendancy of the Orbán regime

Competition & Change ◽

10.1177/1024529418813834 ◽

2018 ◽

Vol 23 (2) ◽

pp. 165-191 ◽

Cited By ~ 7

Author(s):

Adam Fabry

Keyword(s):

Social Policies ◽

Tax System ◽

Flat Tax ◽

Hungarian Society ◽

Concrete Action ◽

Balanced Budget ◽

The Eu ◽

The Imf ◽

At Home

This paper analyses the seemingly contradictory fusion between authoritarianism and neoliberalism in Hungary under the Orbán regime. Since coming into power in 2010 on a popular backlash against austerity, the hard-right Fidesz–KDNP government, led by Viktor Orbán, has carried out a root-and-branch transformation of Hungarian society. While officially proposing a break with neoliberalism at home and abroad, the paper argues that the Orbán regime has rather deepened it, producing a specific variety of ‘authoritarian neoliberalism’, which skilfully combines some of the central tenets of neoliberalism (maintenance of a balanced budget, introduction of a flat tax system and the pursuit of regressive social policies) with ‘ethnicist–populist’ measures that seek to co-opt, coerce or manufacture consensus among subaltern groups in society against alleged ‘enemies’ of the Hungarian nation. While Orbán’s ‘illiberal’ politics have been strongly criticized by neoliberal institutions, such as the IMF and the EU, they have taken little concrete action against the Hungarian government. We argue that the reason for this is pragmatic: the Orbán regime has not only been a model for neoliberal austerity in Europe since the 2008 crisis, but also its authoritarian and xenophobic policies are not that different from other EU states.

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Addressing inequality and poverty with tax instruments

Economic Annals ◽

10.2298/eka1190007r ◽

2011 ◽

Vol 56 (190) ◽

pp. 7-26

Author(s):

Sasa Randjelovic ◽

Jelena Zarkovic-Rakic

Keyword(s):

Income Tax ◽

Poverty Reduction ◽

Western Europe ◽

Tax Reform ◽

Empirical Literature ◽

Tax System ◽

Distributional Effects ◽

Flat Tax ◽

Tax Rate ◽

Comprehensive Income

There is a consensus, in both academia and economic policy circles, that the reform of the personal income tax system in Serbia is necessary one. Two frequently discussed reform scenarios are East European style flat tax and the comprehensive income tax model of Western Europe. Most Central and Eastern European (CEE) countries have recently reformed their income tax systems by introducing some form of flat tax scheme, while in numerous countries of Western Europe the possibility of flat tax reform is also seriously considered. Opponents of the reform usually stress the adverse distributional effects of flat tax schemes. The aim of our paper is to contribute to the empirical literature on the distributional effects of alternative tax reform scenarios. The analysis is based on the tax and benefit micro-simulation model for Serbia (SRMOD). The results suggest that redesigning the existing income tax system so as to introduce a uniform tax rate and increase the basic allowance would somewhat reduce inequality and improve vertical inequity in taxation. On the other hand, in the case of the introduction of comprehensive income tax, considerably larger equalizing and progressivity effects would be achieved. At the same time, since in both cases redistribution will not affect the bottom decile group, no significant effects (in either cases) on poverty reduction will be achieved.

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FEATURES OF TAXATION OF SMALL BUSINESSES IN MODERN CONDITIONS

Innovation in the economy ◽

10.26739/2181-9491-2021-8-1 ◽

2021 ◽

Vol 4 (8) ◽

pp. 4-10

Author(s):

Mokhira Pulatova ◽

Keyword(s):

Small Business ◽

Economic System ◽

Small Businesses ◽

Tax System ◽

Flat Tax ◽

Tax Rate ◽

Tax Benefits ◽

Market Relations

The paper examines the economic content and significance of small business in the economic system. Studied the characteristics and properties of taxation, the application of the simplified system of taxation. The basic directions of perfection of the taxation of subjects of small business for their development activities in conditions of market relations development .Keywords:the simplified tax system, unified tax payment, tax rate, flat tax from individual entrepreneurs, tax benefits.

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ECONOMIC AND SOCIAL ASPECTS OF PROGRESSIVE AND PROPORTIONAL TAXATION OF INCOMES

International Journal of New Economics and Social Sciences ◽

10.5604/01.3001.0012.9939 ◽

2018 ◽

Vol 8 (2) ◽

pp. 161-165

Author(s):

Tomasz Wołowiec

Keyword(s):

Tax Evasion ◽

Opportunity Cost ◽

Social Aspects ◽

Tax Revenue ◽

Lower Income ◽

Tax System ◽

Flat Tax ◽

Red Tape ◽

Business Income ◽

Economic Boom

The case for a flat tax has been around for over two decades. In the early 1980s, Robert Hall and Alvin Rabush-ka of the Hoover Institution developed a tax system that is based on a single rate of taxation for all sources of income, as close as possible to the source. All income is classified as either business income or wages and taxed at one rate, except for a personal allowance exempting lower income individuals and families from taxation (this makes the Hall-Rabushka proposal to some extent progressive). There are no other exemptions, no deductions, no loopholes. The other essential aspect of the flat tax system developed by Hall-Rabushka is radical simplification of the tax system, by removing any deductions or reliefs, and by eliminating double taxation. This proposal repre-sents a fundamental change in the way governments would collect tax revenue. Flat tax is believed to help reduce red tape and associated difficulties and confusion. With tax form down to size of postcard the flat tax system makes tax filling much simpler and more efficient; achieve simplicity, economic efficiency and fairness (same rate for all) – three principle of effective/sound taxation; reduce tax evasion and cheating, by lowering opportunity cost of avoiding taxes. Flat tax systems means elimination of relief, allowances and thus eliminates loopholes in the sys-tem and provide incentives to work, save and invest that trigger an economic boom.

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