An interview with Alvin Rabushka

Tax and Fiscal Policy

An interview with Alvin Rabushka

Philip Booth

28 November 2014

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Alvin Rabushka is often described as the father of the flat tax. His work inspired the adoption of flat-tax systems in many of the former communist countries of central and eastern Europe. This helped bring about a dramatic economic transformation by improving incentives for work and enterprise, reducing compliance costs and increasing tax revenues.

In this interview, Rabushka argues that a flat tax is a fair and equal method of taxation, which can radically improve economic growth.

Philip Booth

Academic and Research Director, IEA

Philip Booth is Senior Academic Fellow at the Institute of Economic Affairs. He is also Director of the Vinson Centre and Professor of Economics at the University of Buckingham and Professor of Finance, Public Policy and Ethics at St. Mary’s University, Twickenham. He also holds the position of (interim) Director of Catholic Mission at St. Mary’s having previously been Director of Research and Public Engagement and Dean of the Faculty of Education, Humanities and Social Sciences. From 2002-2016, Philip was Academic and Research Director (previously, Editorial and Programme Director) at the IEA. From 2002-2015 he was Professor of Insurance and Risk Management at Cass Business School. He is a Senior Research Fellow in the Centre for Federal Studies at the University of Kent and Adjunct Professor in the School of Law, University of Notre Dame, Australia. Previously, Philip Booth worked for the Bank of England as an adviser on financial stability issues and he was also Associate Dean of Cass Business School and held various other academic positions at City University. He has written widely, including a number of books, on investment, finance, social insurance and pensions as well as on the relationship between Catholic social teaching and economics. He is Deputy Editor of Economic Affairs. Philip is a Fellow of the Royal Statistical Society, a Fellow of the Institute of Actuaries and an honorary member of the Society of Actuaries of Poland. He has previously worked in the investment department of Axa Equity and Law and was been involved in a number of projects to help develop actuarial professions and actuarial, finance and investment professional teaching programmes in Central and Eastern Europe. Philip has a BA in Economics from the University of Durham and a PhD from City University.

3 thoughts on “An interview with Alvin Rabushka”

Benji

Posted 28/11/2014 at 16:15 | Permalink

Taxation, that is the coercive appropriation of income/capital is inherently unfair. It does not relate to the benefit the payer receives so distorts incentives.

When something is unfair, economic efficiency suffers. Taxation therefore carries high deadweight losses.

The services we share should only be funded from the value we create together. That value crystallizing as land rent.

Paying land rent as State revenue is non-coercive, and directly relates to the benefit the payer receives. A user fee in other words, not a “tax”.

Paying for State services does not get any simpler, flatter or more efficient when we have true fairness at the heart of “tax” policy.
Richard Wellings

Posted 28/11/2014 at 17:40 | Permalink

@Benji If paying land rent as State revenue is non-coercive, could you explain what would happen to landowners who disagreed with such government impositions and refused to pay?
benj

Posted 02/12/2014 at 18:04 | Permalink

@Richard

For a start, you use the word landowner. You can only “own” what you produce by your own effort or compensation paid for the efforts of others. So, landowner is oxymoronic, in my view. Your question is the same as asking, what should we do with people who don’t what to pay for an expensive car or meal. Perhaps they should consider consuming something a little more affordable? It’s their choice is it not?

I personally think Land users who don’t want to pay land rent automatically become their own sovereign state, and loose the associated rights and privileges of those who pool their land rent, and the benefits they get from doing so.

This has nothing to do with the State. A peaceful and prosperous Anarchy would want to share this Earth(economically) too.

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