Flat tax


Also found in: Dictionary, Wikipedia.
Related to Flat tax: National Sales Tax

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 ?
The United States, like other developed countries, does not suffer from any of these conditions (yet), so it is not clear why it needs a flat tax.
The fact that the federal income tax system is still based on a progressive model - with bracketed rates that increase as the amount of taxable income goes up - is evidence, however, that replacing it with an easier-to-understand flat tax has problems, chief among which is that most tax experts believe it would increase taxes for the working and middle classes while cutting taxes for the rich.
Texas Governor Rick Perry, running in third place for the Republican nomination for president, plans to unveil a flat tax proposal next week.
The chapters review the literature of the impact of taxes on economic behavior, compare the economic costs of different taxes based on differing incentive-based effects, describe compliance and administrative costs of Canadian taxes, compare flat-tax experiences around the world, and present a model of flat tax reform for Canada as formulated by long time US flat tax advocate Alvin Rabushka.
Keywords Flat tax Tax system Middle class Steve Forbes Hall and Rabushka
Albania, a country long famous as the impoverished fiefdom of Stalinist dictator Enver Hoxha, will also adopt the flat tax in 2008.
Professor Minford, head of the Julian Hodge Institute of Applied Macroeconomics at Cardiff Business School, said, 'This lecture could well prove pivotal in raising the flat tax debate higher up the political and economic agenda.
Consumer Income Tax includes a flat tax rate for all income including business income.
He was finally prompted to go public with his concerns after watching a CBS News report by Eric Engberg about then-presidential candidate Steve Forbes' proposal for a flat tax.
Many FTR proposals, such as the flat tax or the national sales tax, promise economic benefits by lowering marginal tax rates and changing the tax base.
IRC section 448(d)(2) imposed a flat tax rate of 35% on the taxable income of qualified personal service corporations, prohibiting them from using the graduated tax rates of 15% to 35% available to most corporations.