According to Rabushka, Canadians spend an estimated $30 billion annually complying with the country's tax laws, a large portion of which is accounted for in time and effort in obtaining and providing receipts, preparing and submitting tax returns, and the engaging services of professionals such as accountants and lawyers.

Reforming Canada’s income tax system using a flat tax of 15% would make the tax code simple and less costly, Rabushka said, adding that a flat tax eliminates nearly all deductions, exemptions, and credits that complicate the current tax system.

Rabushka's proposal is designed to collect the same amount of revenue as the government currently collects, but any reduction in government spending could allow for an even lower rate, he suggested.

The same rate would also be applied to business income.

Rabushka argued that replacing the existing four federal income tax rates with one low rate would remove barriers that discourage people from saving, investing or working harder to earn more money and improve their lives.

“Removing the tax penalties on success through a flat tax would unleash the efforts of hardworking, creative, and entrepreneurial Canadians,” he argued.

One of the most significant changes under the proposed flat tax is the full exemption of savings and investment from taxation. Income put back into the economy in the form of savings or investments would not be taxed under the flat tax, which would encourage more savings and investment. It is also argued that the changes would make Canada much more attractive and competitive internationally.

“The flat tax would revolutionize the incentives for savings and investment, making Canada a beacon for investment in the industrialized world,” Rabushka stated.

The report also proposed that the flat tax be extended to the provincial level, which would range from a low of 6.1% in Newfoundland and Labrador to 15.5% in Quebec. Western Canadian provinces would require some of the lowest provincial flat taxes, with Alberta at 6.8%, Saskatchewan at 7.5% and British Columbia at 7.9%. Ontario would require a flat tax rate of 9.2%. The result would be combined federal-provincial flat taxes ranging from 21.1% in Newfoundland and Labrador to 30.5% in Quebec.

Rabushka pointed out that the economic benefits from a flat tax would flow to all taxpayers, not just those with higher incomes, because all taxpayers receive a personal exemption, an amount of income they can earn tax free. Since the exemption constitutes a much higher portion of income for lower income earners, it results in only a small portion of their total income being taxed. As a result, average tax rates for lower income earners would be substantially lower than for higher income earners with a flat tax.

“Replacing Canada’s personal and business income tax systems with a flat tax will save money and make everyone’s taxes easier to calculate,” Rabushka concluded.

“But more significantly, it will strengthen the Canadian economy and lead to an improved standard of living for all Canadians.”