Examine individual changes

'{{For|the term related to tax incidence regarding flat progressivity|Proportional tax}} {{Use dmy dates|date=October 2019}} {{Taxation}} A '''flat tax''' (short for '''flat-rate tax''') is a [[tax]] system with a constant [[marginal tax rate|marginal rate]], usually applied to individual or corporate income. A true flat tax would be a [[proportional tax]], but implementations are often [[progressive tax|progressive]] and sometimes [[regressive tax|regressive]] depending on [[tax deduction|deductions]] and [[Tax exemption|exemptions]] in the tax base. There are various tax systems that are labeled "flat tax" even though they are significantly different. ==Major categories== Flat tax proposals differ in how the subject of the tax is defined. ===True flat-rate income tax=== A true flat-rate tax is a system of taxation where one tax rate is applied to all personal income with no deductions. ===Marginal flat tax=== Where deductions are allowed, a 'flat tax' is a progressive tax with the special characteristic that, above the maximum deduction, the marginal rate on all further income is constant. Such a tax is said to be marginally flat above that point. The difference between a true flat tax and a marginally flat tax can be reconciled by recognizing that the latter simply excludes certain types of income from being defined as taxable income; hence, both kinds of tax are flat on taxable income. ===Flat tax with limited deductions=== Modified flat taxes have been proposed which would allow deductions for a very few items, while still eliminating the vast majority of existing deductions. Charitable deductions and home mortgage interest are the most discussed examples of deductions that would be retained, as these deductions are popular with voters and are often used. Another common theme is a single, large, fixed deduction. This large fixed deduction would compensate for the elimination of various existing deductions and would simplify taxes, having the side-effect that many (mostly low income) households will not have to file tax returns. ===Hall–Rabushka flat tax=== {{Main|Hall–Rabushka flat tax}} Designed by economists at the [[Hoover Institution]], Hall–Rabushka is a flat tax on [[consumption tax|consumption]].<ref>[http://www.hoover.org/publications/books/3602666.html Hoover Institution – Books – The Flat Tax<!-- Bot generated title -->] {{webarchive |url=https://web.archive.org/web/20100523210531/http://www.hoover.org/publications/books/3602666.html |date=23 May 2010 }}</ref> Principally, Hall–Rabushka accomplishes a consumption tax effect by taxing income and then excluding investment. [[Robert Hall (economist)|Robert Hall]] and [[Alvin Rabushka]] have consulted extensively in designing the flat tax systems in Eastern Europe. ===Negative income tax=== {{Main|Negative income tax}} The negative income tax (NIT), which [[Milton Friedman]] proposed in his 1962 book ''[[Capitalism and Freedom]]'', is a type of flat tax. The basic idea is the same as a flat tax with personal deductions, except that when deductions exceed income, the taxable income is allowed to become negative rather than being set to zero. The flat tax rate is then applied to the resulting "negative income," resulting in a "negative income tax" that the government would owe to the household—unlike the usual "positive" income tax, which the household owes the government. For example, let the flat rate be 20%, and let the deductions be $20,000 per adult and $7,000 per dependent. Under such a system, a family of four making $54,000 a year would owe no tax. A family of four making $74,000 a year would owe tax amounting to 0.20 × (74,000 − 54,000) = $4,000, as would be the case under a flat tax system with deductions. Families of four earning less than $54,000 per year, however, would experience a "negative" amount of tax (that is, the family would receive money from the government instead of paying to the government). For example, if the family earned $34,000 a year, it would receive a check for $4,000. The NIT is intended to replace not just the [[United States|USA]]'s income tax, but also many benefits low income American households receive, such as [[Supplemental Nutrition Assistance Program|food stamps]] and [[Medicaid]]. The NIT is designed to avoid the [[welfare trap]]—effective high marginal tax rates arising from the rules reducing benefits as market income rises. An objection to the NIT is that it is welfare without a work requirement. Those who would owe negative tax would be receiving a form of welfare without having to make an effort to obtain employment. Another objection is that the NIT subsidizes industries employing low-cost labor, but this objection can also be made against current systems of benefits for the [[working poor]]. ===Capped flat tax=== A '''capped''' flat tax is one in which income is taxed at a flat rate until a specified cap amount is reached. For example, the United States [[Federal Insurance Contributions Act tax]] is 6.2% of gross compensation up to a limit (in 2019, up to $132,900 of earnings, for a maximum tax of $8239.80).<ref>[https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/index.html OASDI and SSI Program Rates & Limits] {{Webarchive|url=https://web.archive.org/web/20190218021520/https://www.ssa.gov/policy/docs/quickfacts/prog_highlights/index.html |date=18 February 2019 }}, United States Social Security Administration.</ref> This cap has the effect of turning a nominally flat tax into a [[regressive tax]].<ref>[https://www.economist.com/blogs/freeexchange/2009/04/are_payroll_taxes_regressive Are Payroll Taxes Regressive] {{Webarchive|url=https://web.archive.org/web/20170604093358/http://www.economist.com/blogs/freeexchange/2009/04/are_payroll_taxes_regressive |date=4 June 2017 }} ''The Economist''.</ref> ==Requirements for a fully defined schema== In devising a flat tax system, several recurring issues must be enumerated, principally with deductions and the identification of when money is earned. ===Defining when income occurs=== Since a central tenet of the flat tax is to minimize the compartmentalization of incomes into myriad special or sheltered cases, a vexing problem is deciding when income occurs. This is demonstrated by the taxation of interest income and stock dividends. The shareholders own the company and so the company's profits belong to them. If a company is taxed on its profits, then the funds paid out as dividends have already been taxed. It's a debatable question if they should subsequently be treated as income to the shareholders and thus subject to further tax. A similar issue arises in deciding if interest paid on loans should be deductible from the taxable income since that interest is in-turn taxed as income to the loan provider.<ref name="debate" /> There is no universally agreed answer to what is fair. For example, in the United States, dividends are not deductible<ref>{{cite web|url=http://www.cfo.com/article.cfm/12260551|title=When Is a Dividend Deductible?|work=CFO|access-date=28 November 2009|archive-url=https://web.archive.org/web/20100314160131/http://www.cfo.com/article.cfm/12260551|archive-date=14 March 2010|url-status=live}}</ref> but mortgage interest is deductible.<ref>{{cite web|url=https://www.irs.gov/publications/p936/ar02.html|title=Publication 936 (2014), Home Mortgage Interest Deduction|publisher=|access-date=10 August 2017|archive-url=https://web.archive.org/web/20170910203429/https://www.irs.gov/publications/p936/ar02.html|archive-date=10 September 2017|url-status=live}}</ref> ''Thus a Flat Tax proposal is not fully defined until it differentiates new untaxed income from a pass-through of already taxed income.'' ===Policy administration=== Taxes, in addition to providing revenue, can be potent instruments of policy. For example, it is common for governments to encourage social policy such as home insulation or low income housing with tax credits rather than constituting a ministry to implement these policies.<ref>For example the [http://www.energystar.gov/index.cfm?c=tax_credits.tx_index ENERGYSTAR] {{Webarchive|url=https://web.archive.org/web/20091202143751/http://www.energystar.gov/index.cfm?c=tax_credits.tx_index |date=2 December 2009 }} tax credit</ref> In a flat tax system with limited deductions such policy administration, mechanisms are curtailed. In addition to social policy, flat taxes can remove tools for adjusting economic policy as well. For example, in the United States, short-term [[capital gain]]s are taxed at a higher rate than long-term gains as means to promote long-term investment horizons and damp speculative fluctuation.<ref name="tobin">As a recent example, transaction costs to damp speculation proposed by [[James Tobin]], winner of the 1972 Nobel prize in economics, were recently (2009) proposed to the G20 by British PM Gordon brown as a way to prevent international currency speculation. [https://www.nytimes.com/2009/11/27/opinion/27krugman.html?_r=1 Krugman] {{Webarchive|url=https://web.archive.org/web/20170524021301/http://www.nytimes.com/2009/11/27/opinion/27krugman.html?_r=1 |date=24 May 2017 }}</ref> ''Thus, if one assumes that government should be active in policy decisions such as this, then claims that flat taxes are cheaper/simpler to administer than others are incomplete until they factor in costs for alternative policy administration.'' ===Minimizing deductions=== In general, the question of how to eliminate deductions is fundamental to the flat tax design; deductions dramatically affect the effective "flatness" in the tax rate. Perhaps the single biggest necessary deduction is for business expenses. If businesses were not allowed to deduct expenses, businesses with a profit margin below the flat tax rate could never earn any money since the tax on revenues would always exceed the earnings. For example, grocery stores typically earn pennies on every dollar of revenue; they could not pay a tax rate of 25% on revenues unless their markup exceeded 25%. Thus, [[corporation]]s must be able to deduct operating expenses even if individual citizens cannot. A practical dilemma now arises as to identifying what is an expense for a business.<ref>{{Cite web|url=https://www.irs.gov/corporations|title=Corporations {{!}} Internal Revenue Service|website=www.irs.gov|language=en|accessdate=12 November 2017|archive-url=https://web.archive.org/web/20171113112658/https://www.irs.gov/corporations|archive-date=13 November 2017|url-status=live}}</ref> For example, if a peanut butter producer purchases a jar manufacturer, is that an expense (since they have to purchase jars somehow) or a sheltering of their income through investment? Flat tax systems can differ greatly in how they accommodate such gray areas. For example, the "9-9-9" flat tax proposal would allow businesses to deduct purchases but not labor costs.<ref>[http://www.hermancain.com/999plan Herman Cain's 9-9-9 flat tax variation] {{webarchive |url=https://web.archive.org/web/20110926051459/http://www.hermancain.com/999plan |date=26 September 2011 }}.</ref> (This effectively taxes labor-intensive industrial revenue at a higher rate.<ref>[http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1941800 E.D> Kleinbart, An analysis of Herman Cain's 999 plan, Social Science Research Center, 2011] {{Webarchive|url=https://web.archive.org/web/20111015154319/http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1941800 |date=15 October 2011 }}.</ref>) How deductions are implemented will dramatically change the effective total tax, and thus the flatness of the tax.<ref name="debate" /> ''Thus, a flat tax proposal is not fully defined unless the proposal includes a differentiation between deductible and non-deductible expenses.'' ==Tax effects== ===Diminishing marginal utility=== Flat tax benefits higher income brackets progressively due to decline in [[marginalism|marginal value]].<ref>The diminishing marginal utility means that the number of units of additional 'happiness' afforded by an extra unit of additional money, decreases as one spends more money. [http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_4/PThy_Chapter_4.html] {{Webarchive|url=https://web.archive.org/web/20100330024448/http://www.daviddfriedman.com/Academic/Price_Theory/PThy_Chapter_4/PThy_Chapter_4.html |date=30 March 2010 }}</ref> For example, if a flat tax system has a large per-citizen deductible (such as the "Armey" scheme below), then it is a [[progressive tax]]. As a result, the term Flat Tax is actually a shorthand for the more proper marginally flat tax.<ref name="debate">See for example the flat tax resources at idebate.org</ref> ===Administration and enforcement=== One type of flat tax would be imposed on all income once; at the source of the income. Hall and Rabushka (1995) includes a proposed amendment to the U.S. [[Internal Revenue Code]] that would implement the variant of the flat tax they advocate.<ref>{{Cite book|url=http://www.hoover.org/sites/default/files/flat_tax_appendix.pdf|title=The Flat Tax|last=Hall|first=Robert|last2=Rabushka|first2=Alvin|publisher=Hoover Press|year=2007|isbn=9780817993115|edition=2nd|location=|pages=|chapter=Appendix: A Flat-Tax Law|access-date=6 May 2017|archive-url=https://web.archive.org/web/20151223072322/http://www.hoover.org/sites/default/files/flat_tax_appendix.pdf|archive-date=23 December 2015|url-status=live}}</ref> This amendment, only a few pages long, would replace hundreds of pages of statutory language (although most statutory language in taxation statutes is ''not'' directed at specifying graduated tax rates). As it now stands, the U.S. Internal Revenue Code is over several million words long, and contains many loopholes, deductions, and exemptions which, advocates of flat taxes claim, render the collection of taxes and the enforcement of tax law complicated and inefficient. It is further argued that current tax law slows economic growth by distorting economic incentives, and by allowing, even encouraging, tax avoidance. With a flat tax, there are fewer incentives than in the current system to create tax shelters, and to engage in other forms of tax avoidance. Flat tax critics contend that a flat tax system could be created with many loopholes, or a progressive tax system without loopholes, and that a progressive tax system could be as simple, or simpler, than a flat tax system. A simple progressive tax would also discourage tax avoidance. Under a pure flat tax without deductions, every tax period a company would make a single payment to the government covering the taxes on the employees and the taxes on the company profit.<ref>{{cite news | url=http://www.economist.com/printedition/displayStory.cfm?Story_ID=3861190 | work=The Economist | title=The flat-tax revolution | date=14 April 2005 | access-date=28 October 2005 | archive-url=https://web.archive.org/web/20051220030127/http://www.economist.com/printedition/displayStory.cfm?Story_ID=3861190 | archive-date=20 December 2005 | url-status=live }}</ref> For example, suppose that in a given year, a company called ACME earns a profit of 3 million, spends 2 million in wages, and spends 1 million on other expenses that under the tax law is taxable income to recipients, such as the receipt of stock options, bonuses, and certain executive privileges. Given a flat rate of 15%, ACME would then owe the U.S. [[Internal Revenue Service]] (IRS) (3M + 2M + 1M) × 0.15 = 900,000. This payment would, in one fell swoop, settle the tax liabilities of ACME's employees as well as the corporate taxes owed by ACME. Most employees throughout the economy would never need to interact with the IRS, as all tax owed on wages, interest, dividends, royalties, etc. would be withheld at the source. The main exceptions would be employees with incomes from personal ventures. The ''Economist'' claims that such a system would reduce the number of entities required to file returns from about 130 million individuals, households, and businesses, as at present, to a mere 8 million businesses and self-employed.<ref>{{cite news | url=http://www.economist.com/node/3860731 | work=The Economist | title=The case for flat taxes | date=14 April 2005 | access-date=17 January 2011 | archive-url=https://web.archive.org/web/20101111105707/http://www.economist.com/node/3860731 | archive-date=11 November 2010 | url-status=live }}</ref> However, this simplicity depends on the absence of deductions of any kind being allowed (or at least no variability in the deductions of different people). Furthermore, if income of differing types are segregated (e.g., pass-through, long term cap gains, regular income, etc.) then complications ensue. For example, if realized capital gains were subject to the flat tax, the law would require brokers and mutual funds to calculate the realized capital gain on all sales and redemption. If there were a gain, a tax equal to 15% of the amount of the gain would be withheld and sent to the IRS. If there were a loss, the amount would be reported to the IRS. The loss would offset gains, and then the IRS would settle up with taxpayers at the end of the period. Lacking deductions, this scheme cannot be used to implement economic and social policy indirectly by tax credits and thus, as noted above, the simplifications to the government's revenue collection apparatus might be offset by new government ministries required to administer those policies. ===Revenues=== The Russian Federation is considered a prime case of the success of a flat tax; the real revenues from its Personal Income Tax rose by 25.2% in the first year after the Federation introduced a flat tax, followed by a 24.6% increase in the second year, and a 15.2% increase in the third year.<ref name="rabushka">[http://www.hoover.org/research/flat-tax-work-russia-year-three The Flat Tax at Work in Russia: Year Three] {{Webarchive|url=https://web.archive.org/web/20150402105238/http://www.hoover.org/research/flat-tax-work-russia-year-three |date=2 April 2015 }}, Alvin Rabushka, Hoover Institution Public Policy Inquiry, www.russianeconomy.org, 26 April 2004</ref> The Russian example is often used as proof of the validity of this analysis, despite an [[International Monetary Fund]] study in 2006 which found that there was no sign "of Laffer-type behavioral responses generating revenue increases from the tax cut elements of these reforms" in Russia or in other countries.<ref>{{Cite web |url=http://www.imf.org/external/pubs/ft/wp/2006/wp06218.pdf |title=The "Flat Tax(es)": Principles and Evidence |access-date=8 March 2007 |archive-url=https://web.archive.org/web/20070320070141/http://www.imf.org/external/pubs/ft/wp/2006/wp06218.pdf |archive-date=20 March 2007 |url-status=live }}</ref> ===Overall structure=== Taxes other than the income tax (for example, taxes on sales and payrolls) tend to be regressive. Hence, making the income tax flat could result in a [[Regressive tax|regressive]] overall tax structure. Under such a structure, those with lower incomes tend to pay a ''higher'' proportion of their income in total taxes than the affluent do. The fraction of household income that is a return to capital (dividends, interest, royalties, profits of unincorporated businesses) is positively correlated with total household income.{{Citation needed|date=November 2007}} Hence a flat tax limited to wages would seem to leave the wealthy better off. Modifying the tax base can change the effects. A flat tax could be targeted at income (rather than wages), which could place the tax burden equally on all earners, including those who earn income primarily from returns on investment. Tax systems could utilize a flat [[sales tax]] to target all consumption, which can be modified with rebates or exemptions to remove regressive effects (such as the proposed [[Fair Tax]] in the U.S.<ref name="fairtaxbook">{{cite book | first=Neal | last=Boortz |author2=Linder, John | year=2006 | title=[[The Fair Tax Book]] | edition=Paperback | publisher=[[Regan Books]]|isbn=0-06-087549-6 }}</ref>). ===Border adjustable=== A flat tax system and income taxes overall are not inherently border-adjustable; meaning the tax component embedded into products via taxes imposed on companies (including [[corporate tax]]es and [[payroll tax]]es) are not removed when exported to a foreign country ''(see [[Effect of taxes and subsidies on price]])''. Taxation systems such as a [[sales tax]] or [[value added tax]] can remove the tax component when goods are exported and apply the tax component on imports. The domestic products could be at a disadvantage to foreign products (at home and abroad) that are border-adjustable, which would impact the global competitiveness of a country. However, it's possible that a flat tax system could be combined with tariffs and credits to act as border adjustments (the proposed ''Border Tax Equity Act'' in the U.S. attempts this). Implementing an income tax with a border adjustment tax credit is a violation of the [[World Trade Organization]] agreement. Tax exemptions (allowances) on low income wages, a component of most income tax systems could mitigate this issue for high labour content industries like textiles that compete Globally. In a subsequent section, various proposals for flat tax-like schemes are discussed, these differ mainly on how they approach with the following issues of deductions, defining income, and policy implementation. ==Around the world== {{Main|Tax rates around the world}} ===Countries that have flat tax systems=== These are countries, as well as minor jurisdictions with the autonomous power to tax, that have adopted tax systems that are commonly described in the media and the professional economics literature as a flat tax. In some countries different rates apply to different kinds of income, the main rate for personal income is shown below. [[Image:Flat personal income tax.png|thumb|400px|right|{{legend|#00FF00|No personal income tax}} {{legend|#008000|Flat personal income tax}}]] <!------------------------------------------------------------------ Please try to keep these in alphabetical order. Alvin Rabushka tends to write a little article every time the flat tax is adopted in a country, and his articles are reliable sources, but it is a good idea to also find other sources. In particular, if a country has adopted a system of which it is debatable whether it is truly a flat tax, we should include some discussion of the particular features of that country's system. You can find flag templates for all countries and minor jurisdictions on [[Wikipedia:Inline templates linking countries]] IMPORTANT: IF YOU DON'T HAVE SOURCES, OR THE FLATNESS IS DEBATABLE, LIST THE COUNTRY IN THE "REPUTED" SECTION. -------------------------------------------------------------------> {|class="wikitable sortable" !Country or territory !! Flat tax rate |- |{{flag|Abkhazia}}<ref>[http://www.tppra.org/ru/документы/zakon-respubliki-abhaziya-o-podohodnom-naloge-s-fizicheskih-lic Law on the income tax on individuals] {{Webarchive|url=https://web.archive.org/web/20190612003243/http://www.tppra.org/ru/%D0%B4%D0%BE%D0%BA%D1%83%D0%BC%D0%B5%D0%BD%D1%82%D1%8B/zakon-respubliki-abhaziya-o-podohodnom-naloge-s-fizicheskih-lic |date=12 June 2019 }}, Chamber of Commerce and Industry of the Republic of Abkhazia. {{in lang|ru}}</ref> || 10% |- |{{flag|Artsakh}}<ref>[http://www.aif.am/images/photos/2016_en.pdf Guide to investment] {{Webarchive|url=https://web.archive.org/web/20180903160616/http://aif.am/images/photos/2016_en.pdf |date=3 September 2018 }}, Artsakh Investment Fund, 2016.</ref> || 21% |- |{{flag|Belarus}}<ref name="personaltaxguide">[https://www.ey.com/gl/en/services/tax/worldwide-personal-tax-and-immigration-guide---country-list Worldwide Personal Tax and Immigration Guide] {{Webarchive|url=https://web.archive.org/web/20181224074042/https://www.ey.com/gl/en/services/tax/worldwide-personal-tax-and-immigration-guide---country-list |date=24 December 2018 }}, [[Ernst & Young]].</ref> || 13% |- |{{flag|Belize}}<ref>{{Cite web|url=http://incometaxbelize.gov.bz/wp-content/uploads/2016/07/cap055.pdf|title=Income and business tax act chapter 55|publisher=Income Tax Department of Belize|access-date=17 February 2019|archive-url=https://web.archive.org/web/20181007195535/http://incometaxbelize.gov.bz/wp-content/uploads/2016/07/cap055.pdf|archive-date=7 October 2018|url-status=live}}</ref> || 25% |- |{{flag|Bolivia}}<ref name="personaltaxguide" /> || 13% |- |{{flag|Bosnia and Herzegovina}}<ref>[http://www.fipa.gov.ba/publikacije_materijali/brosure/TAX_BROSURA.26.01.2016.pdf Bosnia and Herzegovina tax system] {{Webarchive|url=https://web.archive.org/web/20181025094012/http://www.fipa.gov.ba/publikacije_materijali/brosure/TAX_BROSURA.26.01.2016.pdf |date=25 October 2018 }}, Foreign Investment Promotion Agency of Bosnia and Herzegovina, 26 January 2016.</ref> || 10% |- |{{flag|Bulgaria}}<ref name="personaltaxguide" /> || 10% |- |{{flag|East Timor}}<ref>[https://www.mof.gov.tl/taxation/income-tax/annual-income-tax-return/?lang=en Annual income tax return] {{Webarchive|url=https://web.archive.org/web/20190218081805/https://www.mof.gov.tl/taxation/income-tax/annual-income-tax-return/?lang=en |date=18 February 2019 }}, Timor-Leste Ministry of Finance.</ref> || 10% |- |{{flag|Estonia}}<ref name="personaltaxguide" /> || 20% |- |{{flag|Georgia}}<ref name="personaltaxguide" /> || 20% |- |{{flag|Greenland}}<ref>[http://int.aka.gl/en/Tax-Greenland/Tax-rates-2017 Tax rates 2016/2017] {{Webarchive|url=https://web.archive.org/web/20180205073330/http://int.aka.gl/en/Tax-Greenland/Tax-rates-2017 |date=5 February 2018 }}, Tax Agency of Greenland.</ref> || 36 to 44% <small>(depending on the [[municipalities of Greenland|municipality]])</small> |- |{{flag|Guernsey}}<ref name="personaltaxguide" /> || 20% |- |{{flag|Hungary}}<ref name="personaltaxguide" /> || 15% (0% for mothers with 4 or more children<ref>[https://www.dailymail.co.uk/news/article-6690489/Mothers-four-children-exempt-income-tax-Hungary.html Mothers with four children will be exempt from income tax for life and receive £7,000 towards a seven-seater car in Hungary after country vows to boost its birth rate]</ref>) |- |{{flag|Jersey}}<ref name="personaltaxguide" /> || 20% |- |{{flag|Kazakhstan}}<ref name="personaltaxguide" /> || 10% |- |{{flag|Kyrgyzstan}}<ref>[https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-kyrgyzstanhighlights-2018.pdf Kyrgyzstan highlights 2018] {{Webarchive|url=https://web.archive.org/web/20190218021423/https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-kyrgyzstanhighlights-2018.pdf |date=18 February 2019 }}, Deloitte.</ref> || 10% |- |{{flag|Lithuania}}<ref name="personaltaxguide" /> || 20% |- |{{flag|Madagascar}}<ref name="personaltaxguide" /> || 20% |- |{{flag|Mongolia}}<ref name="personaltaxguide" /> || 10% |- |{{flag|Romania}}<ref name="personaltaxguide" /> || 10% |- |{{flag|Russia}}<ref name="personaltaxguide" /> || 13% |- |{{flag|Seychelles}}<ref name="personaltaxguide" /> || 15% |- |{{flag|South Ossetia}}<ref>{{cite web |url=http://www.nalog-rso.ru/zakon/zakon9.php |title=Law on the income tax on individuals |publisher=Committee on Taxes and Duties of the Republic of South Ossetia |language=Russian |archive-url=https://web.archive.org/web/20131105212726/http://www.nalog-rso.ru/zakon/zakon9.php |archivedate=5 November 2013 |accessdate=19 June 2017 }}</ref> || 12% |- |{{flag|Transnistria}}<ref>[http://flattaxes.blogspot.com/2008/11/low-flat-tax-has-been-adopted-in.html A Low Flat Tax Has Been Adopted in Pridnestrovie] {{Webarchive|url=https://web.archive.org/web/20150610231607/http://flattaxes.blogspot.com/2008/11/low-flat-tax-has-been-adopted-in.html |date=10 June 2015 }}, Alvin Rabushka, 17 August 2007.</ref> || 10% |- |{{flag|Turkmenistan}}<ref>[https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-turkmenistanhighlights-2019.pdf Turkmenistan highlights 2019] {{Webarchive|url=https://web.archive.org/web/20190218021427/https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-turkmenistanhighlights-2019.pdf |date=18 February 2019 }}, Deloitte.</ref> || 10% |} ====U.S. states==== At the federal level, the [[Taxation in the United States|United States]] taxes personal income at progressive rates. Most [[State income tax|states]] also tax income, most of them also at progressive rates, but some use a flat tax rate. [[Image:Flat state income tax.png|thumb|300px|right|{{legend|#00FF00|No state income tax on individuals}} {{legend|#008000|Flat state income tax on individuals}}]] {|class="wikitable sortable" !State or province !! Flat tax rate |- |{{flag|Colorado}}<ref>[https://leg.colorado.gov/agencies/legislative-council-staff/individual-income-tax%C2%A0 Individual income tax], Colorado General Assembly.</ref> || 4.63% |- |{{flag|Illinois}}<ref>[https://www2.illinois.gov/rev/research/taxrates/Pages/income.aspx Income Tax Rates], Illinois Department of Revenue.</ref> || 4.95% |- |{{flag|Indiana}}<ref>[https://www.in.gov/dor/files/dn01.pdf How to compute withholding for state and county income tax], Department of Revenue of Indiana, 1 January 2020.</ref> || 3.73 to 6.61% <small>(depending on the [[List of counties in Indiana|county]])</small> |- |{{flag|Massachusetts}}<ref>[https://www.mass.gov/guides/personal-income-tax-for-residents Personal income tax for residents], Commonwealth of Massachusetts.</ref> || 5% |- |{{flag|Michigan}}<ref>[https://www.michigan.gov/taxes/0,4676,7-238-75545_43715-153723--,00.html What are the current tax rate and exemption amounts?], Michigan Department of Treasury.</ref><ref>[http://www.michigan.gov/taxes/0,4676,7-238-75545_43715-153955--,00.html What cities impose an income tax?], Michigan Department of Treasury.</ref> || 4.25 to 6.65% <small>(depending on the [[List of cities in Michigan|city]])</small> |- |{{flag|New Hampshire}}<ref>[https://www.revenue.nh.gov/assistance/tax-overview.htm Overview of New Hampshire taxes], Department of Revenue Administration of New Hampshire.</ref> || 5% <small>on dividend and interest income</small> |- |{{flag|North Carolina}}<ref>[https://www.ncdor.gov/taxes-forms/individual-income-tax/tax-rate-schedules/tax-rate-tax-year-2019 Tax rate for tax year 2019], North Carolina Department of Revenue.</ref> || 5.25% |- |{{flag|Pennsylvania}}<ref>[https://www.revenue.pa.gov/GeneralTaxInformation/Tax%20Types%20and%20Information/PIT/Pages/default.aspx Personal income tax], Pennsylvania Department of Revenue.</ref><ref>[https://munstats.pa.gov/Reports/ReportInformation2.aspx?report=EitWithCollector_Dyn_Excel&type=O EIT / PIT / LST Tax Registers], Pennsylvania Department of Community and Economic Development, 15 December 2018.</ref> || 3.07 to 6.9412% <small>(depending on the [[List of municipalities in Pennsylvania|municipality]])</small> |- |{{flag|Tennessee}}<ref>[https://www.tn.gov/revenue/taxes/hall-income-tax/due-date-and-tax-rates.html Due date and tax rates], Department of Revenue of Tennessee.</ref> || [[Hall income tax|1% <small>on dividend and interest income</small>]] |- |{{flag|Utah}}<ref>[https://incometax.utah.gov/paying/tax-rates Tax rates], Utah State Tax Commission.</ref> || 4.95% |} === Jurisdictions reputed to have a flat tax=== *{{flag|Anguilla}} does not have a general income tax,<ref>[https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-anguillahighlights-2018.pdf Anguilla Highlights 2018] {{Webarchive|url=https://web.archive.org/web/20181109111951/https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-anguillahighlights-2018.pdf |date=9 November 2018 }}, Deloitte.</ref> but since 2011 it imposes an "interim stabilisation levy" on salaries, composed of a portion paid by the employer and another paid by the employee through withholding. Each portion has a flat rate of 3%.<ref>[http://www.gov.ai/documents/brochures/ird/Interim%20Stabilization%20Levy%20Brochure%20.pdf Interim Stabilisation Levy] {{Webarchive|url=https://web.archive.org/web/20181109112652/http://www.gov.ai/documents/brochures/ird/Interim%20Stabilization%20Levy%20Brochure%20.pdf |date=9 November 2018 }}, Inland Revenue Department of Anguilla.</ref> This tax is in addition to a mandatory contribution to social security.<ref>[http://www.ssbai.com/contributions.php Social Security Contributions] {{Webarchive|url=https://web.archive.org/web/20181109112033/http://www.ssbai.com/contributions.php |date=9 November 2018 }}, Anguilla Social Security Board.</ref> *{{flag|British Virgin Islands|name=The British Virgin Islands}} do not have a general income tax,<ref>[https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-britishvirginislandshighlights-2018.pdf British Virgin Islands Highlights 2018] {{Webarchive|url=https://web.archive.org/web/20181109111929/https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-britishvirginislandshighlights-2018.pdf |date=9 November 2018 }}, Deloitte.</ref> but impose a payroll tax on salaries, composed of a portion paid by the employer and another paid by the employee through withholding. The employee portion has a flat rate of 8%.<ref>[http://www.bvi.gov.vg/content/payroll-tax Payroll Tax] {{Webarchive|url=https://web.archive.org/web/20181109153104/http://www.bvi.gov.vg/content/payroll-tax |date=9 November 2018 }}, Government of the British Virgin Islands.</ref> This tax is in addition to mandatory contributions to social security and national health insurance.<ref>[http://www.bvissb.vg/bvissbwp/registration-and-contribution/ Registration and contribution] {{Webarchive|url=https://web.archive.org/web/20181109112041/http://www.bvissb.vg/bvissbwp/registration-and-contribution/ |date=9 November 2018 }}, British Virgin Islands Social Security Board.</ref><ref>[http://vinhi.vg/wp-content/nhi/NHI-Brochure.pdf National Health Insurance] {{Webarchive|url=https://web.archive.org/web/20181109112227/http://vinhi.vg/wp-content/nhi/NHI-Brochure.pdf |date=9 November 2018 }}, British Virgin Islands National Health Insurance.</ref> *{{flag|Hong Kong}}: Some sources claim that Hong Kong has a flat tax,<ref name="broken">Daniel Mitchell. "Fixing a Broken Tax System with a Flat Tax." ''Capitalism Magazine,'' 23 April 2004.[http://www.capmag.com/article.asp?ID=3636] {{Webarchive|url=https://web.archive.org/web/20110516024832/http://www.capmag.com/article.asp?ID=3636 |date=16 May 2011 }}</ref> though its salary tax structure has several different rates ranging from 2% to 17% after deductions.<ref>{{cite web|url=http://www.gov.hk/en/residents/taxes/taxfiling/taxrates/salariesrates.htm|title=GovHK: Tax Rates of Salaries Tax & Personal Assessment|date=24 June 2015|publisher=|access-date=22 February 2013|archive-url=https://web.archive.org/web/20130306113625/http://www.gov.hk/en/residents/taxes/taxfiling/taxrates/salariesrates.htm|archive-date=6 March 2013|url-status=live}}</ref> Taxes are capped at 15% of gross income, so this rate is applied to upper income returns if taxes would exceed 15% of gross otherwise.<ref>[http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-hongkonghighlights-2015.pdf Hong Kong Highlights 2015] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-hongkonghighlights-2015.pdf |date=2 January 2016 }}, [[Deloitte]].</ref> Accordingly, Duncan B. Black of ''Media Matters for America,'' says "Hong Kong's 'flat tax' is better described as an 'alternative maximum tax.'" <ref>Duncan B. Black. "Fund wrong on Hong Kong 'flat tax'." ''Media Matters'', 28 February 2005. [http://mediamatters.org/items/200502280004] {{Webarchive|url=https://web.archive.org/web/20070929125315/http://mediamatters.org/items/200502280004 |date=29 September 2007 }}</ref> Alan Reynolds of the Cato Institute similarly notes that Hong Kong's "tax on salaries is not flat but steeply progressive."<ref>Alan Reynolds. "Hong Kong's Excellent Taxes." ''townhall.com'', but the column was syndicated. 6 June 2005. [http://www.cato.org/pub_display.php?pub_id=3793] {{Webarchive|url=https://web.archive.org/web/20070609091009/http://www.cato.org/pub_display.php?pub_id=3793 |date=9 June 2007 }}</ref> Hong Kong has, nevertheless, a flat profit tax regime. *{{flag|Saudi Arabia}} does not have a general income tax, but it imposes [[zakat]] (wealth tax) on the business assets of residents who are nationals of [[Gulf Cooperation Council|GCC]] countries, and income tax on the business income of residents who are not nationals of GCC countries and of nonresidents. Zakat has a flat rate of 2.5%, and income tax has a flat rate of 20%.<ref>[https://www.ey.com/Publication/vwLUAssets/Worldwide_Personal_Tax_and_Immigration_Guide_2017-18/$FILE/Worldwide-Personal-Tax-and-Immigration-Guide-2017-18.pdf Worldwide Personal Tax and Immigration Guide 2017-18] {{Webarchive|url=https://web.archive.org/web/20180329032933/http://www.ey.com/Publication/vwLUAssets/Worldwide_Personal_Tax_and_Immigration_Guide_2017-18/$FILE/Worldwide-Personal-Tax-and-Immigration-Guide-2017-18.pdf |date=29 March 2018 }}, Ernst & Young, September 2017.</ref> ===Countries that had a flat tax in the past=== [[Image:Flat tax in Europe.svg|thumb|right|{{legend|#2d5f2c|Countries that have flat taxes}} {{legend|#54b04f|Countries considering flat taxes}} {{legend|#c0c000|Countries that had flat taxes}}]] *{{flag|Albania}} introduced a flat tax of 10% on personal income in 2008, and replaced it with two rates of 13% and 23% in 2014.<ref>[http://flattaxes.blogspot.com/2009/01/flat-tax-at-work-in-albania-year-one.html The Flat Tax at Work in Albania: Year One] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://flattaxes.blogspot.com/2009/01/flat-tax-at-work-in-albania-year-one.html |date=2 January 2016 }}, Alvin Rabushka, 21 January 2009.</ref><ref>[http://flattaxes.blogspot.com/2013/12/albania-abandons-its-flat-tax.html Albania Abandons Its Flat Tax] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://flattaxes.blogspot.com/2013/12/albania-abandons-its-flat-tax.html |date=2 January 2016 }}, Alvin Rabushka, 29 December 2013.</ref> *{{flag|Czech Republic}} introduced a flat tax of 15% on personal income in 2008, and a second higher rate of 22% in 2013.<ref name="dec2012">[http://flattaxes.blogspot.com/2012/12/flat-tax-roundup-december-2012.html Flat tax roundup December 2012] {{Webarchive|url=https://web.archive.org/web/20130417065227/http://flattaxes.blogspot.com/2012/12/flat-tax-roundup-december-2012.html |date=17 April 2013 }}, Alvin Rabushka, 29 December 2012.</ref> *{{flag|Grenada}} had a flat tax of 30% on personal income until 2014, when it introduced a second lower rate of 15%.<ref>[https://drive.google.com/file/d/0B-zhRw2s7oXgekMwQmgwVU1xY0U/view Income Tax (Amendment) Order, 2014], Grenada Inland Revenue Division.</ref> *{{flag|Guyana}} had a flat tax of 30% on personal income until 2017, when it replaced it with progressive rates of 28% and 40%.<ref>[http://parliament.gov.gy/publications/acts-of-parliament/income-tax-amendmentact-2017/ Income Tax (Amendment) Act 2017] {{Webarchive|url=https://web.archive.org/web/20181109112241/http://parliament.gov.gy/publications/acts-of-parliament/income-tax-amendmentact-2017/ |date=9 November 2018 }}, Parliament of Guyana.</ref> *{{flag|Iceland}} introduced a flat tax on personal income in 2007, at a national rate of 22.75%. With the additional municipal rate, the total tax rate was up to 36%.<ref>[http://www.cato.org/publications/commentary/iceland-comes-cold-flat-tax-revolution Iceland Comes in From the Cold With Flat Tax Revolution] {{Webarchive|url=https://web.archive.org/web/20120728203948/http://www.cato.org/publications/commentary/iceland-comes-cold-flat-tax-revolution |date=28 July 2012 }}, The Business, 21 March 2007.</ref> In 2010, Iceland replaced its flat tax system with progressive national rates of 24.1% to 33%, for a combined (national and municipal) top rate of 46.28%.<ref>[http://flattaxes.blogspot.com/2010/03/iceland-abandons-flat-tax.html Iceland abandons the flat tax] {{Webarchive|url=https://web.archive.org/web/20120305144609/http://flattaxes.blogspot.com/2010/03/iceland-abandons-flat-tax.html |date=5 March 2012 }}, Alvin Rabushka, 16 March 2010.</ref> *{{flag|Jamaica}} had a flat tax of 25% on personal income until 2010, when it introduced additional higher rates of 27.5% and 33%. It restored the flat tax of 25% in 2011, and introduced a second higher rate of 30% in 2016.<ref>[https://www.jamaicatax.gov.jm/documents/10194/31132/Income+Tax+Exemption+2003+-2018+-Jan+2018.pdf Income tax rates, thresholds and exemptions 2003-2018] {{Webarchive|url=https://web.archive.org/web/20190218021408/https://www.jamaicatax.gov.jm/documents/10194/31132/Income+Tax+Exemption+2003+-2018+-Jan+2018.pdf |date=18 February 2019 }}, Tax Administration Jamaica.</ref> *{{flag|Latvia}} introduced a flat tax of 25% on personal income in 1997.<ref>[http://4liberty.eu/flat-tax-reforms/ Flat tax reforms] {{Webarchive|url=https://web.archive.org/web/20180216205846/http://4liberty.eu/flat-tax-reforms/ |date=16 February 2018 }}, 4liberty.eu, 6 March 2013.</ref> The rate was changed to 23% in 2009, 26% in 2010, 25% in 2011, 24% in 2013, and 23% in 2015.<ref>Janis Grasis and Juris Bojārs, [https://books.google.com/books?id=1jY0CwAAQBAJ&printsec=frontcover "Necessity of the introduction of the progressive income tax system: A case of Latvia"], ''Economics, Social Sciences and Information Management'', March 2015.</ref> In 2018, Latvia replaced its flat tax with progressive rates of 20%, 23% and 31.4%.<ref>[https://www.tax-news.com/news/Latvian_Parliament_Adopts_Tax_Reform____74901.html Latvian parliament adopts tax reform] {{Webarchive|url=https://web.archive.org/web/20180216204355/https://www.tax-news.com/news/Latvian_Parliament_Adopts_Tax_Reform____74901.html |date=16 February 2018 }}, Tax-News, 3 August 2017.</ref> *{{flag|Mauritius}} introduced a flat tax rate of 15% on personal income in 2009.<ref name="flat-and-flatter">Alvin Rabushka. "Flat and Flatter Taxes Continue to Spread Around the Globe." 16 January 2007.{{cite web |url=http://www.hoover.org/research/russianecon/essays/5222856.html |title=Archived copy |accessdate=24 June 2007 |url-status=dead |archiveurl=https://web.archive.org/web/20070707094006/http://www.hoover.org/research/russianecon/essays/5222856.html |archivedate=7 July 2007 }}</ref> In 2017, it introduced an additional "solidarity levy" of 5% on high income, for a combined top rate of 20%.<ref>[http://www.mra.mu/download/CircularLetter020817.pdf Income Tax - Pay As You Earn (PAYE)] {{Webarchive|url=https://web.archive.org/web/20171215102700/http://www.mra.mu/download/CircularLetter020817.pdf |date=15 December 2017 }}, Mauritius Revenue Authority, 1 August 2017.</ref> In 2018, it introduced an additional lower rate of 10%.<ref>[http://www.mra.mu/download/CircularLetterPAYE1819.pdf Income Tax - Pay As You Earn (PAYE)] {{Webarchive|url=https://web.archive.org/web/20181024153110/http://www.mra.mu/download/CircularLetterPAYE1819.pdf |date=24 October 2018 }}, Mauritius Revenue Authority, 3 August 2018.</ref> *{{flag|Montenegro}} introduced a flat tax of 15% on personal income in 2007, reduced to 12% in 2009 and 9% in 2010.<ref>[http://flattaxes.blogspot.com/2008/11/flat-tax-spreads-to-montenegro-april-13.html The Flat Tax Spreads to Montenegro] {{Webarchive|url=https://web.archive.org/web/20161014020443/http://flattaxes.blogspot.com/2008/11/flat-tax-spreads-to-montenegro-april-13.html |date=14 October 2016 }}, Alvin Rabushka, 13 April 2007.</ref> It introduced a second higher rate of 15% on salaries in 2013, reduced to 13% in 2015 and 11% in 2016.<ref>[http://www.internationaltaxreview.com/Article/3439659/Montenegro-Crisis-tax.html Montenegro: Crisis tax] {{Webarchive|url=https://web.archive.org/web/20161006083442/http://www.internationaltaxreview.com/Article/3439659/Montenegro-Crisis-tax.html |date=6 October 2016 }}, International Tax Review, 25 March 2015.</ref><ref>[http://www.cdm.me/english/crisis-tax-also-in-2016-the-tax-rate-decreased-to-11 Crisis tax also in 2016; the tax rate decreased to 11%] {{Webarchive|url=https://web.archive.org/web/20160927095457/http://www.cdm.me/english/crisis-tax-also-in-2016-the-tax-rate-decreased-to-11 |date=27 September 2016 }}, Cafe del Montenegro, 14 November 2015.</ref> *{{flag|North Macedonia}} introduced a flat tax of 12% on personal income in 2007, reduced to 10% in 2008.<ref name="flat-and-flatter"/><ref>"The lowest flat corporate and personal income tax rates." ''Invest Macedonia'' government web site. Retrieved 6 June 2007. {{cite web |url=http://www.investinmacedonia.org/news.aspx?news=35 |title=Archived copy |accessdate=6 June 2007 |url-status=dead |archiveurl=https://web.archive.org/web/20070224012548/http://www.investinmacedonia.org/news.aspx?news=35 |archivedate=24 February 2007 }}</ref> In 2019, it introduced a second higher rate of 18% on salaries, and increased the flat tax rate on investment income to 15%.<ref>[https://www.lexology.com/library/detail.aspx?g=b99461c1-33d7-4dda-bf05-584626459ebc Macedonia: Changes in the tax legislation] {{Webarchive|url=https://web.archive.org/web/20190107170730/https://www.lexology.com/library/detail.aspx?g=b99461c1-33d7-4dda-bf05-584626459ebc |date=7 January 2019 }}, Lexology, 28 December 2018.</ref> *{{flag|Saint Helena}} introduced a flat tax of 25% on personal income in 2012, and replaced it with two rates of 26% and 31% in 2015.<ref>[http://flattaxes.blogspot.com/2013/11/st-helena-adopts-25-flat-tax.html St. Helena Adopts a 25% Flat Tax] {{Webarchive|url=https://web.archive.org/web/20161013043951/http://flattaxes.blogspot.com/2013/11/st-helena-adopts-25-flat-tax.html |date=13 October 2016 }}, Alvin Rabushka, 3 November 2013.</ref><ref>[http://www.sainthelena.gov.sh/wp-content/uploads/2013/01/Income-Tax-Ordinance-310712-1.pdf Income Tax Ordinance] {{Webarchive|url=https://web.archive.org/web/20160919181148/http://www.sainthelena.gov.sh/wp-content/uploads/2013/01/Income-Tax-Ordinance-310712-1.pdf |date=19 September 2016 }}, Government of Saint Helena.</ref> *{{flag|Slovakia}} introduced a flat tax of 19% on personal income in 2004, and a second higher rate of 25% in 2013.<ref name="dec2012" /> *{{flag|Trinidad and Tobago}} had a flat tax of 25% on personal income until 2017, when it introduced a second higher rate of 30%.<ref>[https://oxfordbusinessgroup.com/overview/letter-law-comprehensive-review-tax-framework Trinidad & Tobago's recent tax changes and regulations] {{Webarchive|url=https://web.archive.org/web/20190218081846/https://oxfordbusinessgroup.com/overview/letter-law-comprehensive-review-tax-framework |date=18 February 2019 }}, Oxford Business Group.</ref> *{{flag|Tuvalu}} had a flat tax of 30% on personal income until 2009, when it introduced a second lower rate of 15%.<ref>[http://www.paclii.org/tv/legis/num_act/ita1992116/ Income Tax Act 1992] {{Webarchive|url=https://web.archive.org/web/20120410050340/http://www.paclii.org/tv/legis/num_act/ita1992116/ |date=10 April 2012 }}, Pacific Islands Legal Information Institute.</ref><ref>[http://www.tuvalu-legislation.tv/cms/images/LEGISLATION/AMENDING/2008/2008-0010/IncomeTaxAmendmentAct2008.pdf Income Tax (Amendment) Act 2008] {{Webarchive|url=https://web.archive.org/web/20190218021407/http://www.tuvalu-legislation.tv/cms/images/LEGISLATION/AMENDING/2008/2008-0010/IncomeTaxAmendmentAct2008.pdf |date=18 February 2019 }}, Tuvalu Legislation.</ref> *{{flag|Ukraine}} introduced a flat tax of 13% on personal income in 2004, increased to 15% in 2007, and introduced a second higher rate of 17% in 2011.<ref>[http://flattaxes.blogspot.com/2008/11/flat-tax-spreads-to-ukraine-may-27-2003.html The Flat Tax Spreads to Ukraine] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://flattaxes.blogspot.com/2008/11/flat-tax-spreads-to-ukraine-may-27-2003.html |date=2 January 2016 }}, Alvin Rabushka, 27 May 2003.</ref><ref>[http://www.kyivpost.com/content/ukraine/income-tax-rate-to-inch-up-in-2007-25168.html Income tax rate to inch up in 2007] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://www.kyivpost.com/content/ukraine/income-tax-rate-to-inch-up-in-2007-25168.html |date=2 January 2016 }}, [[Kyiv Post]], 5 October 2006.</ref><ref>[http://www.usubc.org/site/member-news/ukraine-overview-of-the-new-tax-code Ukraine: Overview of the new tax code] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://www.usubc.org/site/member-news/ukraine-overview-of-the-new-tax-code |date=2 January 2016 }}, U.S.-Ukraine Business Council, 7 December 2010.</ref> The second rate was increased to 20% in 2015, and the first rate was increased to 18% in 2016.<ref>[http://www.specht-partner.com/ukraine-tax-reform-2015/ Ukraine Tax Reform 2015] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://www.specht-partner.com/ukraine-tax-reform-2015/ |date=2 January 2016 }}, Specht & Partner.</ref><ref>[http://www.lexology.com/library/detail.aspx?g=525dc8b1-d01b-408d-93f5-4cec0bd3b423 Ukrainian tax reform 2016 overview] {{Webarchive|url=https://web.archive.org/web/20160102020901/http://www.lexology.com/library/detail.aspx?g=525dc8b1-d01b-408d-93f5-4cec0bd3b423 |date=2 January 2016 }}, Lexology, 30 December 2015.</ref> ===Countries considering a flat tax system=== These are countries where concrete flat tax proposals are being considered by influential politicians or political parties. *{{flag|Italy}}: During the 2018 electoral campaigns, the right-wing coalition strongly proposed the introduction of a new flat tax, ranging from 15% to 23%.<ref>[https://www.reuters.com/article/us-italy-election-right-brunetta/berlusconi-ally-proposes-23-percent-flat-tax-to-stimulate-italy-idUSKBN1FM1T7?il=0 Berlusconi ally proposes 23 percent flat tax to stimulate Italy] {{Webarchive|url=https://web.archive.org/web/20180216143831/https://www.reuters.com/article/us-italy-election-right-brunetta/berlusconi-ally-proposes-23-percent-flat-tax-to-stimulate-italy-idUSKBN1FM1T7?il=0 |date=16 February 2018 }}, [[Reuters]], 2 February 2018.</ref> ==See also== ''Economic Concepts'' *[[Excess burden of taxation]] (or more broadly [[deadweight loss]]) *[[Fiscal drag]] (also known as Bracket creep) *[[Taxable income elasticity]] (also known as Laffer Curve) ''Tax Systems'' *[[Consumption tax]] *[[FairTax]] *[[Income tax]] *[[Kemp Commission]] *[[Land value tax]] *[[Negative income tax]] *[[Optimal tax]] *[[Progressive tax]] *[[Regressive tax]] *[[Sales tax]] *[[Single tax]] *[[Value added tax]] *[[9–9–9 Plan]] ==Notes== {{Reflist|30em}} ==References== *[[Steve Forbes]], 2005. ''Flat Tax Revolution''. Washington: Regnery Publishing. {{ISBN|0-89526-040-9}} *[[Robert Hall (economist)|Robert Hall]] and [[Alvin Rabushka]], 1995 (1985). ''[https://web.archive.org/web/20050224084602/http://www-hoover.stanford.edu/publications/books/flattax.html The Flat Tax]''. Hoover Institution Press. *Richard Parncutt, 2006–2010. Free enterprise without poverty: Effectively progressive income tax.''[https://web.archive.org/web/20110514152858/http://www.uni-graz.at/~parncutt/BIFT2.html]''. *Anthony J. Evans, "[https://web.archive.org/web/20070808181054/http://www.openrepublic.org/open_republic/20050701_vol1_no1/articles/20050619_ft.htm Ideas and Interests: The Flat Tax]" ''Open Republic'' 1(1), 2005 ==External links== {{wikiquote|Taxation}} *[http://www.heritage.org/Research/Taxes/bg1765.cfm The Laffer Curve: Past, Present and Future]: A detailed examination of the theory behind the Laffer curve, and many case studies of tax cuts on government revenue in the United States *[http://www.econtalk.org/archives/2007/04/rabushka_on_the.html Podcast of Rabushka discussing the flat tax] Alvin Rabushka discusses the flat tax with [[Russell Roberts (economist)|Russ Roberts]] on [[EconTalk]]. *[https://web.archive.org/web/20101008222858/http://politalkshow.com/2010/09/20/episode-96-the-flat-tax/ Podcast of Rabushka discussing the flat tax] Alvin Rabushka discusses the flat tax on [http://politalkshow.com/ PoliTalk]. * [http://freedomandprosperity.org/2010/videos/the-flat-tax-how-it-works-and-why-it-is-good-for-america/ The Flat Tax: How it Works and Why it is Good for America] [[Category:Taxation and redistribution]]'