When there is a system of progressive taxation, tax filers must have access to the current income brackets to accurately file their taxes. Here are the essential flat tax pros and cons to examine. Only earned income is taxed, which would theoretically encourage economic growth.Īs with any system of taxation, there are several advantages and disadvantages which must be considered. That simplifies the tax code because it eliminates deductions, exemptions, and credits. Instead of using a progressive system of taxation, where higher income earners pay a greater percentage of tax at new income levels, a flat tax system guarantees a specific rate.

At the time of writing, there are currently flat tax systems in place in 8 U.S. Compare Standard and Premium Digital here.Īny changes made can be done at any time and will become effective at the end of the trial period, allowing you to retain full access for 4 weeks, even if you downgrade or cancel.A flat tax is a system of taxation that would require every household to pay the same tax rate on their income, regardless of how much income they made during the year.

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Why not a flat tax