Flat Tax
A tax system with a single rate applied to all income levels.
A flat tax is a system where all taxpayers pay the same percentage of their income, regardless of how much they earn. Unlike progressive systems, there is only one tax bracket. Proponents argue it simplifies the tax code and reduces compliance costs, while critics say it disproportionately burdens lower-income earners.
Examples
- Estonia applies a flat income tax rate of 20%.
- Russia used a 13% flat tax from 2001 to 2020.