The Hall–Rabushka flat tax is a fully developed flat tax

Flat tax

A flat tax is a tax system with a constant marginal tax rate. Typically the term flat tax is applied in the context of an individual or corporate income that will be taxed at one marginal rate...

 on consumption designed by American economists Robert Hall

Robert Hall (economist)

Robert Ernest "Bob" Hall is an American economist and a Robert and Carole McNeil Senior Fellow at Stanford University's Hoover Institution. He is generally considered a macroeconomist, but he describes himself as an "applied economist"....

 and Alvin Rabushka

Alvin Rabushka

Alvin Rabushka is an American political scientist. He is a David and Joan Traitel Senior Fellow at the Hoover Institution at Stanford University, and member of the Mont Pelerin Society. He is best known for his work on taxation and transition economies...

 at the Hoover Institution

Hoover Institution

The Hoover Institution on War, Revolution and Peace is a public policy think tank and library founded in 1919 by then future U.S. president, Herbert Hoover, an early alumnus of Stanford....

. Loosely speaking, Hall–Rabushka accomplishes this by taxing income

Income tax

An income tax is a tax levied on the income of individuals or businesses . Various income tax systems exist, with varying degrees of tax incidence. Income taxation can be progressive, proportional, or regressive. When the tax is levied on the income of companies, it is often called a corporate...

 and then excluding investment

Investment

Investment has different meanings in finance and economics. Finance investment is putting money into something with the expectation of gain, that upon thorough analysis, has a high degree of security for the principal amount, as well as security of return, within an expected period of time...

. An individual could file a Hall–Rabushka tax return on a postcard. The Hall–Rabushka flat tax may include an exemption, which allows the tax to preserve progressivity

Progressive tax

A progressive tax is a tax by which the tax rate increases as the taxable base amount increases. "Progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax rate...

.

In the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

, extensive tax reform

Tax reform

Tax reform is the process of changing the way taxes are collected or managed by the government.Tax reformers have different goals. Some seek to reduce the level of taxation of all people by the government. Some seek to make the tax system more progressive or less progressive. Some seek to simplify...

 has not taken place since the Tax Reform Act of 1986

Tax Reform Act of 1986

The U.S. Congress passed the Tax Reform Act of 1986 to simplify the income tax code, broaden the tax base and eliminate many tax shelters and other preferences...

, and like other tax reform, the flat tax has not advanced far in the U.S. political process. However, Eastern Europe

Eastern Europe

Eastern Europe is the eastern part of Europe. The term has widely disparate geopolitical, geographical, cultural and socioeconomic readings, which makes it highly context-dependent and even volatile, and there are "almost as many definitions of Eastern Europe as there are scholars of the region"...

 has enthusiastically embraced the flat tax after the fall of the iron curtain

Iron Curtain

The concept of the Iron Curtain symbolized the ideological fighting and physical boundary dividing Europe into two separate areas from the end of World War II in 1945 until the end of the Cold War in 1989...

. Hall and Rubushka have consulted extensively in designing these flat taxes.