Why?

• Complexity is the enemy of a reasonable tax system. If there are many different tax rates and many different definitions of allowances, tax breaks and exemptions, then the system is more difficult to understand.
  
  

But Why Flat Tax?

• A flat tax, which simply says that everyone pays the same percentage of their income, is simple--a good thing in a tax system. For example, instead of the 893 different forms the Internal Revenue Service uses, there could be only two (see References below).
  
  

Why Not?

• A flat tax system might not be progressive: If the poor and the rich pay the same rate, then many would see this as unfair. According to this view, the rich should not only pay more in actual money but a higher proportion of their incomes as well.
  
  

A Progressive Flat Tax

• A flat tax can be made progressive by having a tax-free allowance. The higher the allowance that is tax-free, then the more progressive a flat-tax system is. While the rich will be paying the same marginal rate (percentage of an extra dollar of earnings) they will be paying a higher average rate (percentage of total earnings).
  
  

Are There Any Flat Taxes?

• Yes, several countries now have flat income taxes, including Russia and Estonia. The sales tax in many parts of the United States is a flat tax on consumption. The dividend tax in the United States is a flat tax. They are all examples of a flat-tax law--one single tax rate on an economic activity.