In an article in the Stanford Daily, Alvin Rabushka, the David and Joan Traitel Senior Fellow at the Hoover Institution, discusses his advice to Texas governor Rick Perry on Perry’s flat-rate tax plan. Rabushka also commented on Herman Cain’s 9-9-9 plan: “In effect what you’ve got is labor paying a 9 percent tax, labor again paying 9 percent on income above a poverty threshold, and then again paying 9 percent as consumers.” Click here to read the article.
All the leading GOP presidential candidates have embraced some form of a flat tax, a simplified tax code, or both. Milton Friedman first popularized the idea of a flat tax in his 1962 book Capitalism and Freedom: “The subsidy to the beneficiaries is independent of their poverty or wealth; the man of means receives it as much as the indigent. The tax which pays the subsidy is a flat-rate tax on earnings up to a maximum.” In the Hoover Archives are Milton Friedman’s papers, which discuss a negative income tax system that includes a flat tax. In The Flat Tax (second edition), Hoover fellows Robert E. Hall and Alvin Rabushka refined Friedman’s ideas in a tax reform plan that involves “tax[ing] all income, once only, at a uniform rate of 19 percent.” Thirty-seven countries have instituted some form of the flat tax.