Flat tax

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Flat tax

A tax which is levied at the same rate on all levels of income. See also progressive tax.

Flat Tax

A way to structure an income tax where everyone (or nearly everyone) pays the same marginal rate. For example, a flat tax may be set at 15%, and everyone will pay that rate regardless of how much they earn. This contrasts with progressive taxation, where the marginal tax rate increases with increased income. Proponents of a flat tax argue that it provides an incentive for people to earn more (because they keep more of what they earn than under a progressive tax system), which in turn spurs economic growth. Opponents contend that a flat tax deprives the government of revenue and progressive taxation does not disincentivize earning more because, even at higher rates, people keep more after taxes than they would have done if they earned less.

flat tax

An income tax that has a single rate of taxation. For example, a taxing authority may levy a flat tax of 3% against gross income. See also graduated flat tax.

Flat tax.

A flat tax, also known as a regressive tax, applies to everyone at the same rate, as a sales tax does.

Advocates of a flat income tax for the United States say it's simpler and does away with the kinds of tax breaks that tend to favor the wealthy. Opponents say that middle-income taxpayers would carry too large a proportion of the total tax bill.

References in periodicals archive ?
Of course, the later scheme takes into consideration allowable deductions, but given the much lower rate of 8 percent as opposed to 32 percent, chances are the taxpayer will end up with a lower tax liability if he/she elects the flat-tax scheme.
Deidre O'Neill, 16, said Forbes' flat-tax plan - which would tax Americans earning $36,000 or more at a 17 percent flat rate - would hurt her parents.
This feature of the flat-tax reform implies a one-time "lump-sum" tax, or wealth levy, on existing assets.
Only if government's share of the economy were cut to less than 17 percent would Armey's flat-tax rate be sufficient to balance the federal budget.
Most of the proposals can be categorized as either flat-tax plans or consumption-based plans, while the "USA" tax proposal sponsored by Senators San Nunn (D-Ga.
Steve Forbes's flat-tax candidacy vaulted him to the covers of Time and Newsweek--and will almost certainly affect the tenor of the debate between President Clinton and Bob Dole in the fall.
Is there anything at all to like about the flat-tax idea?
When millionaire magazine publisher Steve Forbes showed up to promote his flat-tax schemes, MacKenzie nailed him.
The purest of flat-tax proposals would clear the tax code of a bewildering array of deductions, preferences and exemptions.
For example, the Armey flat-tax proposal would completely eliminate all itemized deductions, e.
These flat-tax proposals do not tax income from saving; they are therefore a form of consumption tax.