It is important to comprehend that a flat tax is a more complex system than solely a single-rate income tax. Nevertheless, not a single country has gone this far yet. (Grecu, 2004) The Hall-Rabushka work – describing the purest form of the flat tax – provides a benchmark for any proposal and actual flat tax reform in the world. The following year, Republican presidential candidate Steve Forbes based his campaign on the same idea – a single income tax rate for all Americans. Although flat tax wasn’t a new idea, as it had been working in practice in Hong Kong for over 30 years by that time, this was one of the first and one of the most exhaustive analyses on the topic. In 1985, their book „The Flat Tax“ followed. Hall and Alvin Rabushka of the Hoover Institution in the editorial page of the Wall Street Journal in the article “A Proposal to Simplify Our Tax System” on Decem(Rabushka, 2007). ![]() The idea of a flat tax was introduced by economists Robert E. The flat tax countries are under a growing pressure to revert their flat tax reforms and necessary fiscal consolidation is used as an excuse for such requests. ![]() In addition to a strong opposition to the idea from leftist politicians worldwide there is an urgent threat represented by a current financial crisis, exploding deficits, and government debts going through the roof. This encouraging trend is, however, under a permanent fire. By 2011 there were already 27 countries with flat proportional income taxes. Although Hong Kong introduced its flat tax back in 1947, we could not see any similar reforms until 1994, when several transition economies of former Eastern bloc followed. List of countries implementing flat tax reforms has been gradually getting longer over time.
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