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Stanford Law Review


While the Flat Tax has attracted substantial attention, proponents of the tax have not given any details of its implementation. Without this detail, evaluation of the tax is difficult. Claims of simplicity may be false. The efficiency claims for the Flat Tax rely on its relative unavoidability and its cleanly stated economic incentives, but without details, these claims cannot be evaluated Moreover, the distribution of the tax burden will be affected by its implementation. This article attempts to fill in the gap by considering the design issues presented by the Flat Tax. A wide variety of issues are considered, including the Flat Tax taxation of financial transactions, business formations and reorganizations, small businesses, accounting methods, and international transactions. The major finding is that the regime will be complex and difficult to implement, although still somewhat simpler than current law. The tax will also be easily avoidable, which will reduce its efficiency. Without the claims of simplicity and efficiency, the argument for the Flat Tax becomes extremely weak.

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