There are now more than 20 jurisdictions using the flat tax and this number is expected to continue growing, most of the nations are transition economies in Eastern and Central Europe but there are a handful of wealthy economies that use this simple and fair tax system. The international evidence, shows clearly that Canada would benefit greatly from adopting the flat tax.
The North American discussion of the flat tax could be characterized as nice theory, but not practical. Some doubters think a flat tax would not work if it were implemented. Others think that ideological objections are too formidable or that beneficiaries of current tax preferences are too powerful to overcome, meaning a flat tax will never get enacted.
In truth, the flat tax is anything but a policy experiment. There are now more than 20 jurisdictions using the flat tax and this number is expected to continue growing. Most of the flat-tax nations are transition economies in Eastern and Central Europe but there are a handful of wealthy economies that use this simple and fair tax system. In other words, the flat tax is a proven instrument of sound fiscal policy. The international evidence, combined with traditional research on tax policy, shows clearly that Canada would benefit greatly from adopting the flat tax.
Lessons from Abroad - Flat Tax in Practice is a chapter from a forthcoming book on tax reform to be published later this year by The Fraser Institute.
