Categories: General Tax Terms
Flat Tax: A flat tax is a tax system that imposes the same tax rate on all taxpayers, regardless of their income level. This means that everyone pays the same percentage of their income in taxes, simplifying the tax calculation process.
For example, if a flat tax rate is set at 15%, an individual earning $50,000 would pay $7,500 in taxes, while someone earning $100,000 would pay $15,000. Unlike progressive tax systems, where tax rates increase with higher income brackets, a flat tax does not take into account the taxpayer’s ability to pay.
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