The Uneasy Case for the Flat Tax
About forty years ago, when all right-thinking people believed that the progressive income tax was the ideal form of tax, two University of Chicago professors, Harry Kalven and Walter Blum, wrote an incisive article called, "The Uneasy Case for Progressive Taxation". The article did not show that the progressive income tax was a bad tax. It showed only that many of the things said for it were unproved and probably unprovable.
What Kalven and Blum said about the progressive income tax could probably be said about any specific tax. Now with the rush to embrace the flat tax, it is time to remind ourselves that the case for it too is uneasy.
Introduction of the flat tax would change the present system of income taxation in two ways: first, it would change the base of the tax; second, it would flatten the rate. These are two quite different things.
Presumably changing the base will increase its size. Expanding the base would permit a "reduction" of the rate within a revenue-neutral policy. Actually, what happens is a reduction of the rate on what was previously included in the base and an increase in the rate on what was not previously included. Thus, the inclusion of employer-provided