[lbo-talk] The flat tax and income inequality

[Max B. Sawicky]

(I haven't read the Rogoff piece.)  I don't know what kind of tax system China has now, but if you barely have one that works to begin with, in a developing country with a lot of destitute people, a flat tax is not a bad starting point.  The zero bracket could eliminate the need for many to owe any tax.  You can always add brackets, and you can also have a different rate on the business side of the tax (assuming we're talking about the classic Hall-Rabushka form of a flat tax).  The initial form of it could be more progressive than what they have now.  The context for its introduction is crucial to evaluating it.  For any social-democratic system, as well as for the U.S., it would be a big step backwards.  For other places, perhaps not.


>
>This guy is a Harvard economist. Does he belong to the
>flat earth society as well as the flat tax society?
>  As China illustrates opening markets far from
>solving the inequality of wealth distribution in China
>has made it much worse, so much according to the
>article that inequality is greater in China than the
>US.