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.
Analogy
Think of flat tax as going to an all-you-can-eat buffet where everyone pays the same fixed price, regardless of how much they eat. Some may feel it's fair because everyone pays equally, while others may argue it's not fair because some people eat more than others.
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.
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