Flat Tax

Definition

Flat tax refers to a system where everyone pays the same tax rate regardless of their income level. It simplifies the tax structure but can have different impacts on different income groups.

Related terms

Progressive Tax: A tax system where the tax rate increases as income level rises.

Regressive Tax: A tax system where the tax rate decreases as income level rises.

Marginal Tax Rate: The tax rate applied to each additional dollar of income earned.