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.
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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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

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.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
The Forbes' flat tax plan eliminates the double taxation on personal savings, dividends and capital gains.
To determine what income class will carry the tax burden under a flat tax plan, the tax data was classified in three income levels.
To date, few empirical tests have been conducted to determine any effect the proposed flat tax plans might have on the distribution of tax burden.
In this week's op-ed, Cruz framed his flat tax plan in the vein of the tax cut that Reagan signed into law in 1981.
* The Armey & Shelby Flat Tax Plan, which would make all interest, dividends and capital gains non-taxable.
During a question-and-answer session with the audience, Perry was asked if his flat tax plan would include the standard deduction in the current tax system.
Perry has designed his plan with the help of publishing magnate Steve Forbes, whose own 17 percent flat tax plan was the linchpin of his unsuccessful 1996 and 2000 runs for the Republican presidential nomination.
Under the various flat tax plans, many forces might act to change the new equilibrium interest rate.
Of the flat tax plans they would have the most negative impact on the municipal bond market.
The flat tax plans would eliminate the deductibility of state and local taxes and would eliminate the current tax preference for tax-exempt municipal bonds, because federal taxes would no longer apply to the interest payments to individuals or corporations from corporate bonds.
The opening salvos of the GOP Presidential campaign debate in Iowa reverberated in the nation's capital last week with the introduction of a series of rival federal flat tax plans and a GOP national commission report.