Revenue, Progressivity, and the Flat Tax

13 Pages Posted: 18 Aug 2012

See all articles by Mun S. Ho

Mun S. Ho

Resources for the Future

Kevin J. Stiroh

Federal Reserve Bank of New York

Date Written: January 1998

Abstract

This paper uses detailed household data to analyze revenue potential and progressivity under two popular “flat tax” proposals. The results show that the Hall and Rabushka version of the flat tax would generate $626 billion in revenue in 1993 while the more generous plan of Armey and Shelby would produce only $538 billion. Integrating the individual tax with the business tax indicates that both proposals are progressive. However, there is a substantial shift of the tax burden from the highest income classes to the middle classes in comparison to the current system.

Suggested Citation

Ho, Mun S. and Stiroh, Kevin J., Revenue, Progressivity, and the Flat Tax (January 1998). Contemporary Economic Policy, Vol. 16, Issue 1, pp. 85-97, 1998. Available at SSRN: https://ssrn.com/abstract=2131638 or http://dx.doi.org/10.1111/j.1465-7287.1998.tb00503.x

Mun S. Ho (Contact Author)

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

Kevin J. Stiroh

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
(212) 720-6633 (Phone)
(212) 720-8363 (Fax)

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