Flat tax

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Related to Flat taxes: Progressive Taxes

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 ?
Washington's deficit-driven interventions in the American economy since the 2008 Wall Street meltdown have led some to trumpet eastern Europe's experience with flat taxes as proof they would work in the U.S.
In eastern Europe, however, where growth percentages have long outpaced those in western Europe and the U.S., right-leaning economists with advice from Americans like Rabushka have lobbied successfully for flat taxes. Since Estonia implemented one in 1994, most of eastern Europe, including Russia but excluding major holdouts Hungary and Poland, have opted for a flat tax.
Print 1995) (discussing background of flat tax proposals and several technical aspects relating to implementation); Michael Calegari, Flat Taxes and Effective Tax Planning, 51 NAT'L TAX J.
A portion of those t surveyed were given a copy of the executive summary from the AICPA's Flat Taxes and Consumption Taxes: A Guide to the Debate before they were interviewed.
There are two kinds of flat taxes federal candidates and Congress are considering which have one common characteristic, but significant differences.
Cal Jillson, a political science professor at Southern Methodist University, said discussion of flat taxes and consumption taxes works well politically with Republican voters, but described them as "pie-in-the-sky, no-way-in-hell" proposals that won't ever muster enough support in Congress.
(Instead, you should read "Flat Taxes and Consumption Taxes: A Guide to the Debate," published by the AICPA Tax Division in 1995.) But for most CPAs, even those whose practice is heavily tax-oriented, this book provides an excellent primer, and the little time it takes to read it will pay off many times by giving you a basic understanding of where we are in our tax system, how we got here and where we may well be headed.
The report, Flat Taxes and Consumption Taxes: A Guide to the Debate, was released in January and is the result of a two-year effort by the AICPA tax division.
It would also have to be approved by Congress, which economists and political analysts say is unlikely, given the reality that flat taxes tend to hit the middle class hardest and the rejection of previous, similar tax proposals.
There are significant obstacles in the path of adoption of any form of consumption or flat taxes.