Research Report Demythologizing the Russian Flat Tax
Clifford G. Gaddy, William G. Gale
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On January 1, 2001, Russia introduced what has frequently been called a "flat tax." In this report, we examine the limited research and information available on the effects of Russias personal income tax reform and reach five principal conclusions: The change in the personal income tax was not a stand-alone reform and the personal income tax component of the reform package bears little resemblance to a Hall-Rabushka flat tax; economic growth had begun well before the reforms and microeconomic data suggest that the tax rate reductions had little if any effect on labor supply; and it is likely that the significant increase in compliance following the 2001 reform is attributable to changes in the administration and enforcement of tax laws.
Research Areas International development Taxes and budgets
Tags International social sector reform Campaigns, proposals, and reforms Federal tax issues and reform proposals