Talk:Flat tax

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removed section on tax efficiency[edit]

the section was a signel sentence that said that the burden of a tax was proportional to the square of its rate. First tax levles are not being compared here so this is irrelevant. Second the concept of a burden is meaningless without context.


Archive of previous discussions[edit]

it appears that all of the discussions and disputes below have been resolved in the current form of the article. New discussions or recurrences of old disputes relevant to the new form of the article should be posted above this line.

No one has addressed the fact that this article is factually wrong. This article does not cover flat taxes at all. It covers flat rate taxes, which are a different type of tax.

Error in the fairness description[edit]

"..taxing that last 100 of income the same amount despite vast differences in the marginal value of money is unfair.."

Flat tax is not about taxing the same "amount" as said in the article, but the same _percentage_.

If the tax rate is 20% a person making 1 000 000 would pay 200 000 and a person making 100 would pay 20. In order for this to be unfair, the marginal value of 20 for someone making 100 would have to be less than the marginal value of 200 000 for someone making 1 000 000. —Preceding unsigned comment added by 193.145.46.52 (talk) 08:22, 18 May 2009 (UTC)

But even so, it's still unfair because in contrast, the price of goods are NOT percentage based. Even in your example, taking $20 from a poor person has more impact because he's suddenly much closer to being unable to purchase a loaf of bread (whose price is independent of income), than taking 200000 from a rich person. —Preceding unsigned comment added by JeramieHicks (talkcontribs) 00:47, 20 July 2010 (UTC)

Maybe I wasn't paying attention during my Econ1 classes, my point is, for someone to be poor to the extent he or she can't or has difficulties to buy a loaf of bread pre-assumes people in this category have no job or any sort of income on which he could be taxed upon. How much is 20% of 0.00? Can anybody help? A flat tax based system is based on the principle of taxing on income. If there's no income, there is no tax. In addition, such system will greatly expand the taxable base at a much lower rate as opposed to the current, which in turn will not only produce more output but also more higher tax receipts for the government, and as a result, people in economic distress will have a better funded welfare system on which to rely upon. —Preceding unsigned comment added by 160.33.98.121 (talk) 17:57, 16 September 2010 (UTC)

Any person earning an above average wage would be in support of the flat taxation system whereas people like me whose families just scrape by with there parents low income wages need the graduated taxation system. People's opinions also relate to their ethnicity for example when I was in school in the islands the traditional expectations were to respect authority figures and sit and listen whereas here in New Zealand we are encouraged to question and discuss different viewpoints. Overall, from having significantly different practices in schools a lot of people that are my ethnicity struggle to adapt to New Zealand schools therefore not understanding studies and falling behind therefore failing requirements for university and therefore having to settle with a much more low income job than the people who understand the education practices. Iv'e looked at statistics and I believe this is why so many people end up becoming on the dol or being stuck in a 'white collar job'. Either that or they aren't motivated and don't live in an achieving environment.I hope I haven't offended anyone with my views and if so i apologise. —Preceding unsigned comment added by 203.109.203.78 (talk) 07:31, 24 March 2011 (UTC)

Internal inconsistency[edit]

The article says

A flat tax system and income taxes overall are not border-adjustable; ... Though, it's possible that this argument falls under the Conflating Concepts category since a flat tax system with border adjustments could be implemented as easily as one without.
There is no way this is right. Someone please fix.
24.177.173.231 (talk) 04:17, 23 September 2008 (UTC)
Please explain how it is inconsistent. Border adjustments may be attempted through a tariff and credit system. The U.S. proposed one for their income tax titled the Border Tax Equity Act. I'm not sure how well it would go over with the WTO though. Morphh (talk) 13:27, 23 September 2008 (UTC)
The first sentence says that flat taxes are not border adjustable. The second sentence says that flat taxes are border adjustable. Kitplane01 (talk) 17:24, 23 September 2008 (UTC)
Aye, I see what you're saying. The tariff and credit does not really make the flat tax border adjustable. It's more of a credit against foreign sales taxes, and a tax on foreign imports to make up the imbalance of not having a border adjustment element in an income tax. I guess you might be able to make a border adjusted income tax in theory, though this has not been done in practice since it would violate WTO rules. So I'll reword - thanks for the clarification. Morphh (talk) 17:37, 23 September 2008 (UTC)

More factual information, fewer "arguments". Merge the adoption list, split off the politics. Good idea?[edit]

I started the Flat tax adoption around the world page because I thought it would be good to have a place where I could work on gathering some simple, factual information with high-quality citations without getting embroiled in flame wars. Now that that page is stabilizing, it may be a good idea to merge it back in with this page. In fact, I think that a simple list of countries with flat tax regimes is more important material for this page than endless lists of arguments about the desirability of the flat tax, which I believe really should go on a separate page. I'm not going to do any merging or moving right now, but please give some thought to this. Sjeng 15:32, 23 June 2007 (UTC)

I just went ahead and merged. I think that's the easiest way out of the Iceland kerfuffle and the whole contradicting pages issue. There is now some redundant information, which you are of course free to clean up, but please leave in the version that has all the citations (mine ;-) ). Sjeng 14:27, 24 June 2007 (UTC)

Iceland[edit]

Does Iceland have a flat tax system, as indicated in one of the opening paragraphs, or it does not (as indicated by the map of Europe that follows later in the article)? --Klamber 12:49, 6 March 2007 (UTC)

It does not, according to this: [1] SRG275 16:15, 20 April 2007 (UTC)
Iceland introduced the flat tax very recently, and the European map has not been updated yet (do you volunteer?). There are a number of features of the Icelandic system that are atypical of flat tax systems (for instance, the rates are rather high), but I recall hearing that further tax reforms are being planned. I'm trying to keep better track of the developments, and document them, on the new flat tax adoption around the world page.
Note, in case I hadn't been clear, that the randburg page is simply out of date, whether or not you want to call the new system "flat".Sjeng 15:42, 23 June 2007 (UTC)

Re: It does not. Personal income tax is two-step, 0% and 35%; dividends, interests etc. carry 10%, VAT is 3-step. Removed the reference to Iceland. Note that the Cato institute is not a reputable source. It is a heavily partisan entity on this issue, and in this instance is trying to use the success of Iceland's economy to bolster its case for a flat tax, despite the fact that taxation there is about as flat as boulders. Asgrrr 13:11, 22 June 2007 (UTC)

Actually, if you have a 0% bracket and an N% bracket, that's usually called flat. If you don't want to call that flat, you've got to omit most of the other countries too. Even Estonia has a standard deduction, which comes down to a 0% bracket.
Also, the Cato institute is definitely an organization with a very particular political point of view, but also has a reputation to keep up in Washington. While any organization with a political axe to grind might bend the facts to fit the axe, Cato is no more or less reputable than the other major think tanks; just a little more radical. I've tried to update the Iceland references on Flat tax adoption around the world. The way I've been dealing with this is that I try to keep that page up to date and meticulously referenced, and I leave it up to other people to use that page as a source. If you have better references to add there, or citations to sources that contradict other sources, please add them over there.Sjeng 14:31, 23 June 2007 (UTC)

A flat tax with a 0% bracket is an oxymoron, and directly contradicts the definition. Nobody would call a tax with the two brackets 30% and 35% a flat tax. Yet it is MUCH flatter than a 0% and 35% bracket tax, so let's call a shovel a spade. That certain people call a tax with a 0% bracket a flat tax is nothing more than ideological bankruptcy on their part. As to the "adoption" page, I don't believe in maintaining the same set of information in multiple places. It is a cardinal sin of information science. Here's a reference which proves the non-flat nature of income tax in Iceland:

http://rsk.is/birta_sidu.asp?vefslod=/skattar/tekjuskattur_og_utsvar.asp&val=1.0

I repeat that Cato is not a reputable source and cannot be the basis of wikipedia information of this sort on its own. Asgrrr 19:15, 23 June 2007 (UTC)

Many "flat taxes" have more then one rate. In fact, I don't know any of the flat tax proposals in the United States that have only one rate. The article itself describes this. I also agree with Sjeng that Cato is fine for a source - they fall under the requirements for a reliable source. We can't pick and choose like you suggest... this org is not reputable and this one is - Wikipedia would never get anything done as each idology argued that the others sources were "not reputable". They satisfy WP:SOURCE and there is not much more to discuss about it. Although, a secondary source would be better then a primary source if possible but not required. Morphh (talk) 22:40, 23 June 2007 (UTC)

That's all as maybe. The fact remains Cato are wrong in this case, unless it is accepted that ALL taxes are flat taxes, as it indeed seems some here would contend. If so, the definition at the top of the article needs to be modified, because it does not seem to apply. Can someone give an example of a proper definition, or explain when an non-flat tax starts being flat? I honestly don't get it. In the Cato article, they appear to be saying that the recent modification of income tax from a 3-step 0%/36%/38% to a 2-step 0%/35% tax represents the move from a non-flat tax to a flat one (a very minor modification, I would like to point out). http://www.rsk.is/birta_sidu.asp?vefslod=helstutolur/helstutolur.asp&sel=alagning2006&val=0.0 How does this translate to an accurate definition? Asgrrr 23:41, 23 June 2007 (UTC)

Most flat taxes (that are based on personal income) untax income up to a certain point (0% on the first $24,999) and then tax it at a flat rate thereafter (35% - $25,000 and up) to allow some form of progressivity. "Flat taxes" as a advertised name or bill come in many shapes and sizes as politions use the term to gain favor to a proposal, which may not be a flat tax in the strictest definition. You may be refering to a proportional tax, which are very rare. Cato bein right or wrong is a matter of opinion. However, even if they were "wrong" per say, the Wikipedia policy is verifiability, not truth (see Wikipedia:Verifiability). Cato is a reliable source under Wikipedia policy and the information is verifiable. It is up to the reader to make their own opinion based on the reference provided. If you have a source that contends that Cato is incorrect and Iceland does not have a flat tax, then we can include it as well as a disputed point and express why they think it is not so. It may be a POV issue to exclude it when we have a source claiming it to be a flat tax. We could also turn it into a factual statement by stating the source: "Cato Institue states that Iceland is a flat tax,[1] but XYZ org disagrees with this conclusion.[2]" Morphh (talk) 0:13, 24 June 2007 (UTC)
Please refer to the Flat tax adoption around the world page, where you will now find a citation to a paper, from Cato, that draws into question whether the Iceland tax is to be called flat. Note that Mitchell finds it necessary to specify "Hall-Rabushka flat tax" as the thing that Iceland's isn't. That's probably a good idea, because unlike "flat tax", "Hall-Rabushka flat tax" is actually pretty well defined by a particular book written by those two people. Sjeng 13:03, 24 June 2007 (UTC)

At the center of this dispute is the as yet unresolved question: What is the definition of a flat tax? Sjengh, Morphh, in your arguments, you do not adhere to the definition of a flat tax contained in the article. You therefore need to supply a new definition if this is to go anywhere. That individuals and institutions arbitrarily refer to all and sundry as flat taxes, is no basis. If people started to refer to the Earth as flat, I would really hate to see Wikipedia state that the Earth is flat. Asgrrr 14:59, 24 June 2007 (UTC)

I don't think it is for us to make such a static definition, such may be considered POV. Why does my definition above not adhear to the flat tax contained in the article. The lead states "Flat taxes, implemented as well as proposed, usually exempt from taxation household income below a statutorily determined level that is a function of the type and size of the household. As a result, such a flat marginal rate is consistent with a progressive average tax rate. Otherwise, all income or consumption is taxed at the same marginal rate." Also review the section "Possible implementations". Morphh (talk) 18:59, 24 June 2007 (UTC)

This is the definition: "A flat tax (short for flat rate tax) taxes all household income, and possibly corporate profits as well, at the same marginal rate. A flat tax usually refers to the taxation of incomes but can be applied to consumption." What comes after, which is what you quoted, is in direct conflict with the definition, as is the thrust of your arguments. This further illustrates the need for a new definition, or a clause noting that certain taxes popularly referred to as "flat", are not actually flat. The word "flat" in this context is not arbitrary. It refers to the shape of a curve that would appear on a graph describing a flat tax. This curve would be a horizontal line, which is flat. Now I ask yet again: what is the accurate definition of a flat tax? Asgrrr 19:23, 24 June 2007 (UTC)

I've reworded the lead to try and reduce the ambiguity in the definition. Hopefully this helps. The common definition of a flat tax (which is mostly used to imply income taxation as oppose to consumption or a sales tax) is usuall not a horizontal line in regard to average tax rate and progressivity. Certainly the term of flat tax implies one rate but in practice and legislation, it may be one rate 35% but exempts income up to a certain level - so they don't count 0%. This is of course regarding a marginal tax rate view and when such an exemption is applied to an average tax rate it becomes a progressive tax. Morphh (talk) 0:57, 25 June 2007 (UTC)

Thanks. I sharpened it up a little as well. Two points remain:

1. What is "a progressive average tax rate"?

2. It needs to be stated what the article means when it refers to "flat tax"; a true flat tax, or one that has simply been called such by a punter? Asgrrr 01:32, 25 June 2007 (UTC)

  1. There should be a correction from the term average tax rate to "effective tax rate" or "effective average tax rate". A progressive effective average tax rate is a two part definition. Progressive regarding income meaning that the more money you earn, the higher the tax rate applied to that income. The effective average tax rate is the ratio of the amount of taxes paid to taxable income over total income. So if your tax rate was 10% on $100 but the first $20 was exempt, then your effective average rate would be 8% on the $100 (10% on $80). The less money you make, the more the effect the exemption has reducing your effective rate to 0% (like if you only made $25). The more money you make, the less effect the exemption has up to an effective rate of 9.99%.
  2. I don't like some of the changes you've made as they seem POV to me. You've defined the "true flat tax" as the correct term and everything else to be a misleading deception of a flat tax. As I had it, it was more an integrated part of the definition that flat taxes often exclude a portion of income. With defining something less flat, the term is being used in the aspect of tax incidence (progressivity) and not in relation to the number of marginal rates. Flat taxes often only define one rate (35%) but then they change the term of what is defined as taxable income. I'm sure there are other exemptions to consider.. even in a "true" flat tax - mortgage interest, health care, child credits. So long as their is social engineering to be achieved, politicians will manipulate either the tax brackets or what they define as taxable income. I don't think it is Wikipedia's place to say that changing the base of taxable income is misleading or a misrepresentation of a flat tax. Morphh (talk) 13:43, 25 June 2007 (UTC)
I've posted to WikiProject Taxation requesting others to review the lead. I'm in the U.S. and we don't have a flat tax, only proposals. So, I might be overstepping as my knowledge on flat tax implementations around the world is limited. However, we still have to be aware of POV and not state that one form of flat tax is correct and another is misleading. Morphh (talk) 14:55, 25 June 2007 (UTC)

Points well taken. However;

1. This paragraph doesn't seem to be saying anything pertinent (at least I still don't understand it), so I would like to delete it.

2. I am aware that what I added is strident. However, it is only POV if a different POV exists. A different POV can only exist if there is a different definition out there of what a flat tax is, and that is what is needed here. Anyone can propose a tax with exemptions, but not necessarily claim to be proposing a flat tax. The latter is a specific concept, one which entails NO exepmtions; otherwise, who is to say which tax is and isn't flat? Is a poll tax a flat tax? Whyever not? Isn't anyone free to call poll tax a flat tax? I'm continuing this discussion below, as it has moved beyond the scope of "Iceland". Asgrrr 16:44, 25 June 2007 (UTC)

For one thing I have never ever heard anyone in Iceland describe the Icelandic income tax system as a flat tax. In fact there are some right wing pundits who argue for a flat tax system, which they contrast favorably with the system we currently have, saying things like that they want "the personal deduction to be abolished and a low flat tax to be used instead" ("að persónuafsláttur væri felldur niður og þeim mun lægri flatur skattur tæki við"[2]). Cato trumpeting the abolishing of the (relatively tiny) high-income tax as some sort of major move, ushering in a new flat tax era, is very silly indeed. The high-income tax was only established in the 90's under basically the same right-wing government we have now. If Iceland has a flat tax now then it also had a flat tax in 1990, under the last socialist government. Haukur 00:30, 27 June 2007 (UTC)

Czech republic[edit]

In possible implementation souln't the czech republic be discuosed? --J intela 04:45, 4 May 2007 (UTC)

Yes, it probably should. WP:Be bold and go discuos (or discuss) it. ;-) Sjeng 15:46, 23 June 2007 (UTC)

Czech Rep. does NOT have flat tax nowadays! The list of countries should probably be updated, it seems a bit old. — Preceding unsigned comment added by 90.177.58.176 (talk) 10:24, 10 March 2012 (UTC)

Modern Theory[edit]

Hasn't there been a modern, American discourse on the flat tax by some famous businessman/politician? I think its Forbes or Bloomberg?? Can someone verify and add their ideas here or in the article? Gautam Discuss 08:11, 8 May 2007 (UTC)

Forbes. "Flat Tax Revolution". See here [3]. I haven't read it yet, so no comment. Manchester Liberal

New article - remove redirect[edit]

Just wanted to put in informal suggestion here that we remove the redirect from proportional tax to this article and turn it into an article. To follow the idea of progressive tax & regressive tax, this article does not generally discuss the aspects of a proportional tax in that sense but more the aspects of Flat tax legislative implementations and proposals. I suggest the proportional article discuss information identical to the other two regarding tax incidence. We could put a {{For}} tag on both articles to allow for any disambig. Morphh (talk) 13:45, 18 May 2007 (UTC)

Alright - I followed the Be Bold and Ignore all rules philosophy and created this article. Please expand as needed. :-) Morphh (talk) 0:43, 21 May 2007 (UTC)

Adoption page[edit]

I've created a separate page called flat tax adoption around the world. That page can be a simple list of countries that have adopted the flat tax, along with several reliable references to the media and/or professional literature for each country, and a description of any peculiarities in the particular country's implementation. That way, this simple, factual information can be separated from the long lists of arguments for and against on this page, and we'll be able to focus on completeness, accuracy, and sources. Sjeng 12:18, 16 May 2007 (UTC)

Thanks for your efforts - the sources are great. However, I disagree with creating a separate article for this information. I would much prefer to see that in a section of this article. We already have a separation of data where that article has sources that this one doesn't. I think that this article needs a serious cleanup / restructure and your article could help in this as a major section to this. Any heavy discussion on a country's tax system should be done in an article specific to that country's tax structure. Morphh (talk) 12:29, 20 May 2007 (UTC)
Sure, do with it as you please. If you want that information to go on the main flat tax page, go ahead. The problem is that the main flat tax page is already very long, and I didn't want to make it much longer. Probably there are other parts of it (especially the long swaths of vague "arguments" for and against) that should be removed or moved elsewhere, whereas some solid factual information with citations about which countries adopted a flat tax and when could well go on the page itself, I suppose. Personally, I think that the history of the adoption of the flat tax in various countries is more interesting, and more easily described in an NPOV way, than the details of various politically rather fringy (albeit economically mostly quite sound) US proposals. Also, some references to economics research (gasp!) might be appropriate.Sjeng 06:13, 27 May 2007 (UTC)

Contradictions in the list with other articles[edit]

These four lists need attention to be synchronized:

Discuss here Talk:Tax_rates_around_the_world#Contradictions_in_the_list_with_other_articles Alinor 18:44, 1 June 2007 (UTC)

Post Communism[edit]

How come mostly former communist countries employ flat taxes and other very liberal economic policies? --J intela 06:38, 19 June 2007 (UTC)

Many western European countries have a long history with moderately collectivist policies applied by democratically elected government. In those countries, some rather unfortunate experiments were tried, but the democratic system has usually been able to backtrack when the collectivism went so far as to stifle the economy, or civil liberties, too obviously. In former communist countries, on the other hand, extremely radical collectivism was pushed on the people by dictatorial governments for decades, and it very obviously did not work. I actually don't think it is surprising at all that given such a history, people would choose to adopt more radically liberal (in the European sense of the word) policies. Note that all of this is not really all that appropriate for the talk page. Talk pages are misleadingly labeled "discussion", but it's usually appreciated if you talk about fixing the article. (What? Did I just break the rules myself? Oh my...) Sjeng 15:52, 23 June 2007 (UTC)

What is a "Flat tax"?[edit]

See previous discussion above, under "Iceland".

I feel that this whole article is meaningless to a large degree. It starts off with a definition of flat tax as follows:

"A flat tax (short for flat rate tax) taxes household income, and possibly corporate profits as well, at one marginal rate."

This is the intuitive, and in my opinion, the original definition of the concept. It derives from the observation that a tax that applies to all income equally would appear as a horizontal (flat) line on a graph displaying taxation vs. income. In contrast, e.g. a progressive tax would appear on a similar graph as a series of line segment on different levels, i.e. not appearing as a flat surface. However, despite opening with this clear and sensible definition, the article then cites a great number of taxes that fail to conform to it, labelling them "flat". Now it is true that in general parlance, people refer to all sorts of taxes as flat, although they are anything but according to this definition of ours, and certainly would not appear as a flat, horizontal line on a graph of taxation vs. all income. The bottom line is: a reader of this article is not going to learn anything from reading it, because wherever the term "flat tax" appears in it, it can mean just about anything. There is no indication in the article what criteria a tax must fulfill to deserve the label "flat", in the article. Now I have asked many times, what it means for a tax to be flat, in the terms of this article, and nobody seems to know. I sure don't.

A major rewrite is called for I think. Asgrrr 16:56, 25 June 2007 (UTC)

I don't disagree with a major rewrite - I think it is in rough shape. It is been nominated for COTM, please support it. If it doesn't get out voted, I'll promote it. I don't see a conflict with the definitions but if we were to choose which one is more accurate then I would choose the exemption definition as this is the often applied application and that proposed in legislation. Does anyone have a true flat tax on personal income? There could be differnce in corporate and personal and again if you consider consumption taxes like a sale or VAT (that has a flat rate). Morphh (talk) 19:43, 25 June 2007 (UTC)

Bringing Iceland up once again, it has had for more than 10 years now a flat tax on income from dividends, interests and other financial ventures; there's a single rate and no deductions are allowed. However, other personal income is taxed in 2 steps, 0% and 35%. On the whole though, this represents three distincts brackets for household income, 0, 10 and 35, which is a stretch to describe as flat.

Whichever definition is arrived at in the end is not a big deal to me. Personally I don't believe that there exists any definition that can reflect the many uses of the phrase "flat tax" that are out there. It seems to be used about anything whatsoever. The purpose of the article is to enlighten the reader about such a state of affairs. That is not POV, that is verifiable fact (insofar as my understanding of the situation is correct). If it simply contends that this country and that has a flat tax, then that is nothing more than POV. What I now realize I should have said about the Cato article in the first place is that it is POV, because it is.

Anyway, I think it is undeniable that the definition at the beginning of the article is the original concept behind the phrase "flat tax". This may not have been realized in many places, thus the definition can represent something of a gold standard. Taxation described as flat may then deviate from this standard to a certain extent, but how far can one deviate? That is what we need to agree on, I think. Asgrrr 21:42, 25 June 2007 (UTC)

Just to let you know I don't care for the last two changes made. One added the term "so-called" which is POV and it removed one of the most important concepts regarding taxation (particularly when discussing flat taxes), which is progressivity. Then you added a self reference to the section of true flat tax, which is not recommended per MoS. I know they were made in good faith and you've been discussing it here but I just don't think they have improved the article. Morphh (talk) 12:39, 26 June 2007 (UTC)
Reading the last edit made, I think it mixes terms again by using the term flat tax as proportional tax. Three levels of "progressivity" - Regressive, Proportional, Progressive. Tax schemes - Flat tax, Sales tax, VAT, Graduated income tax, Excise, etc. I think we need to be careful of not making this article about or confusing this article with proportional tax incidence. I think we need to be careful about defining a flat tax system as a proportional tax structure. My opinion is that this article should be about flat tax systems and proposals, with appropriate reference to aspects of progressivity. Anyway.. something to think about. Morphh (talk) 15:55, 26 June 2007 (UTC)

I don't agree that "so-called" is POV. Everything on this earth and over it is so-called. I am a so-called Wikipedian, for instance. Sure, so-called is sometimes used as a detracting term, but not always. So-called does not exclude that the subject in question is properly called. What is POV is the contention that taxes that do not obey the extant definition of a flat tax, or any other forthcoming definition, are flat taxes. What my change did was to add a (necessary) warning that things called flat taxes can deviate considerably from the established understanding of what a flat tax is, yet being "so-called". If there is a better way to convey that message, I will be that much happier. As to "progressive average tax rate", I still cannot fathom what pertinent information that paragraph was supposed to convey. To my mind it throws the reader off and adds nothing. If you can explain it to me I would be obliged.

Finally, as to your closing thoughts; I think there is one central question we need to ask ourselves before anything else: WHAT IS A FLAT TAX??? I have my answer, and would like to see more. :) Asgrrr 21:29, 26 June 2007 (UTC)

There are two definitions for "so-called" 1 : commonly named : popularly so termed <the so–called pocket veto> 2 : falsely or improperly so named <deceived by a so–called friend>. I read this using the second definition as that is normally how I hear it used. So I would prefer to find another term. I'll try to think of another way to reword that progressive sentence. Yes.. what is a flat tax... I've requested assistance from a few other editors that have a good deal of tax knowledge to try and comment on the discussion. Morphh (talk) 0:19, 27 June 2007 (UTC)
Dear editors: Regaring "what is a flat tax," I probably can't add much to the excellent discussion above. It is sometimes said that "words mean things." The statement is really a circumlocutory, abbreviated expression for the more accurate statement that "people mean things when people use words." Stating that a particular word or phrase "means" a particular thing is not as helpful as stating who is using that word to mean what is being meant in a particular context. Even the authoritative dictionary definitions of words are based on lexicographers' summaries of how different people have used the same words to mean different things in actual texts. For an example of how many different things a word can "mean," look up the word "run" in a good collegiate dictionary.
I haven't read the entire article, but rather than saying on this talk page that "this definition is the correct one" or "no, but that definition is the correct one," maybe we could identify the various sources that use the term "flat tax" in different ways (assuming that there is more than one definition), then name that source in the article along with that source's definition, and then provide examples, etc., of how a given tax might be a "flat tax" under definition #1, but not a flat tax under definition #2.
I'm not really sure, as the "flat tax" is definitely not an area of expertise for me. Famspear 12:35, 30 June 2007 (UTC)

This page would be clearer with a more mathematical representation of each type of tax. For example

True flat tax = income^0.0 * taxrate ...In a "true" flat tax system, every taxpayer pays the same amount. For example, driver's license fees are often a true flat tax. Everybody pays the same fee, regardless on income.
Proportional "flat" tax = income^1.0 * taxrate ...The proportional tax is generally known as the flat tax. Sales tax tends to be a flat tax.
Progressive tax = income^x * taxrate {where x > 1.0} ...Under a progressive tax, the marginal taxrate increases with income.
Regressive tax = income^x * taxrate {where x < 1.0} ...Under a regressive tax, the marginal taxrate decreases with income.
Flat tax with exemption = income * taxrate - exemption ...The flat tax can have exemption subtracted from the bottom line of the tax bill.
Flat tax with deductions = (income - deductions) * taxrate ...The flat tax can have deductions subtracted from the top line of the tax bill. —Preceding unsigned comment added by 72.74.234.9 (talkcontribs)


Countries that may have a flat tax (Removed rumors)[edit]

I removed the section on countries that may have a flat tax, since by its own admission:

These are countries for which there are some rumors claiming that the country has a flat tax, but there are no reliable sources proving or disproving that statement...

Rumors without reliable sources (blogs and internet forums don't count) don't belong on Wikipedia. (WP:VERIFY) If anyone can substantiate with reliable sources the presence or absence of a flat tax in Bosnia-Herzegovina, Hong Kong, Iceland or Iraq, then by all means do so. Djcastel 15:12, 31 July 2007 (UTC)

I agree with your point but many of these do have sources. If you look at the discussion above on "Iceland" or "What is a flat tax", some of these are just debates on if they're system is really a flat tax system as people use different definitions in describing a plan. If some call it a flat tax, and this is source, then how should we classify it. My argument was to make the definition broad to allow for this but there is dispute on how it should be presented. I added the content back in for the moment until we has this out a little further. Morphh (talk) 17:06, 31 July 2007 (UTC)
I examined these references more closely, and found that the "flat tax" issue seems to be confused with other issues, such as taxes on investments, and high taxes versus low taxes. For example, Hong Kong clearly does not have a flat tax, as the Cato Institute article admits that there are four tax brackets. It's counted as such nonetheless simply because it does other "good" things like have a low rate and exempt investment revenues. This expands the notion of flat tax to any system that has low taxes for high income brackets. On the flip side, Iceland is not considered to have a flat tax because the rate is high and it taxes dividends. This confusion results from the bias of the sources, which use "flat tax" as a rhetorical device for any tax system that they advocate, since "flat" sounds fair, simple and egalitarian. The Wikipedia article should classify countries according to the definition of "flat tax" stated at the beginning, and note the rhetorical use of "flat tax" in other contexts. Djcastel 19:54, 31 July 2007 (UTC)
Hong Kong is tricky, because there's a dual system. There are indeed four tax brackets, but instead the taxpayer can choose to be taxed under a flat system with just one rate (OK, two if you count the tax-free allowance). I'll try to find a proper reference for this. Agreed, but that means deciding whether a system with a tax-free allowance (or 0% band) is or is not a flat tax. Almost all commentators accept that it is, and if you don't then there really aren't any practical examples left to talk about. Manchester Liberal (talk · contribs) 00:52, August 1, 2007
I guess we just have to be carefull. We have no basis to say this is a flat tax but this one is not based on our own definition of what we think a flat tax should be. For POV, I would think we would need to state that so and so claims this to be a flat tax and so and so states that it is not. While I agree with you, I'm not sure we can make such a distinction between rhetorical use without presenting bias on the matter. I think we could define what most consider a flat tax to be and then discuss other plans that fall outside the normal definition and are claimed to be a flat tax by some. I'm not even sure this article should be listing what countries have flat taxes. Should there be a separate article that lists such countries? I'm not sure how to approch it... just tossing out some thoughts for the discussion. Morphh (talk) 0:27, 01 August 2007 (UTC)
In the Hong Kong case, there are tax brackets of 2%, 8%, 14%, and 20%, with various deductions and exceptions. They give you the option of a "standard rate" of paying 16% of your gross income, which is the supposedly "flat" part, since there's almost no deductions.[4] All this amounts to is that, despite the 20% rate on taxable income, everyone is guaranteed not to have to pay more than 16% gross, which is why it's called by some an "alternative maximum".
Multiple tax rates are used by 98% of the population, so if we're going to call a tax rate "flat" because 1.5% pay the 16% rate, then virtually every progressive tax system could be called "flat"! If the term "flat tax" means anything, it should mean a single, flat rate, as the article states at the beginning. Otherwise, what's the scope of this article? Any tax scheme that lowers the upper bracket rates? Any tax scheme that doesn't have deductions for at least one bracket? I admit that there can be ambiguous cases of "flat taxes", where we shouldn't take sides (e.g., does 0% count?), but how can a blatantly multi-tiered tax structure be considered a "flat tax" if words mean anything? Politically biased misuse of a term can be noted, but we should not adopt it ourselves if the article is to remain coherent. Djcastel 15:49, 1 August 2007 (UTC)

Pursuant to the above, I think we should make the following changes:

  • Bosnia-Herzegovina: remove as unsourced
  • Iceland: Classify as "countries with a flat tax," while retaining the mentioned caveats. Contrary to the current classification, Iceland actually does meet the common definition (single tax rate), but it fails less widely accepted criteria (it has deductions, a high marginal rate, taxes capital gains).
  • Iraq: Reclassify as "with a flat tax", since no one disputes it actually has a flat tax, but only on its effectiveness. Tax evasion is a distinct issue.
  • Transnistria: Reclassify as "with a flat tax," since no one disputes it actually has a flat tax, but only whether it ought to be considered a country, a fact we should note.
  • Hong Kong: As I've said, this can hardly be considered a "flat tax" system by any standard, as even the cited articles favorable to the system admit. It has some of the secondary features desired by some flat tax advocates, such as a low marginal rate and no tax on investments, but it clearly lacks anything resembling a single rate. So it would be misleading to even say that it "may have a flat tax." Still, it comes up often enough in "flat tax" discussions that we shouldn't omit it. Perhaps "Countries reputed to have a flat tax," would cover it. Djcastel 18:11, 1 August 2007 (UTC)
I'm fine with that. Morphh (talk) 18:23, 01 August 2007 (UTC)

Uruguay isn't listed but it's highlighted on the map. I'm not sure which is correct, but one or the other should be removed.Marcus (talk) 17:29, 22 April 2009 (UTC)

Iceland again[edit]

The list of flat tax countries says that it is a list of countries having what is "commonly described in the media and the professional economics literature as a flat tax". This just isn't true for Iceland, which I have never seen called a flat tax country in any Icelandic literature. Just last week I was reading a lead article in Fréttablaðið by ex-prime minister and right-wing politician Þorsteinn Pálsson. The article argued in favour of instituting a flat income tax ("flötum tekjuskatti") in Iceland.

"Við ríkjandi aðstæður gæti á hinn veginn verið rétt að beina hugmyndum um frekari skattalækkanir að athugunum á nýrri kerfisbreytingu á tekjuöflun ríkis og sveitarfélaga með flötum tekjuskatti. Slíkar hugmyndir hafa verið reifaðar bæði á vettvangi opinberra starfsmanna og Viðskiptaráðs.

Kerfisbreyting af því tagi er hreint ekki einföld. En hún er áhugavert skoðunarefni. Umræðan ein gæti orðið vísir að grósku nýrra hugmynda." [5]

Apparently the right-wing pundits in Iceland don't realize that they are already living in flat-tax fantasyland. The Icelandic income tax is not "commonly described in the media" in Iceland as a flat tax. I doubt it is commonly discussed at all in the media of other countries. Haukur 14:08, 7 August 2007 (UTC)

Fitting complex tax systems into boxes such as 'flat tax' may be impossible but if we look at eg. Estonia vs Iceland then the personal deduction in Estonia is 2000 EEK per month (87 GBP) whereas in Iceland it is 90.000 ISK per month (692 GBP). This means that neither of these countries has a flat tax. So if a person in Estonia has a salary of 20000 EEK per month [6] (866 GBP) then the effective tax rate is 20.7%. If this person then goes and earns 1000 EEK extra then the tax of that 1000 EEK is at the rate 23%. Now, how do you want to convert 20000 EEK into ISK? Going to the bank gives you 112.539 ISK. If you earn that amount per month in Iceland then your effective tax rate is 7.5% but if you earn 1000 ISK extra (or 1000 EEK) then you pay 35.7% tax of that extra money. That is a huge difference. Of course you can say that this conversion is not accurate. Perhaps a salary of 20000 EEK per month is more compatible with a salary of 400.000 ISK. The effective tax rate of 400.000 ISK is 29% and if you earn anything above that the tax rate of that is 35.7% Now the difference starts to become comparable to the Estonian system. Maybe it is then most accurate to say that neither Iceland nor Estonia has a flat tax rate. Ps. As far as I can see there is no fixed tax free amount in Latvia, but you can deduct some expenses. Is that then a (more) flat tax rate? Stefán 20:43, 7 August 2007 (UTC)
I wonder whether with the recent developments, Iceland is going to start to disappear from lists of countries with a flat tax from things like the Cato institute Nil Einne (talk)
Oh lookie here [7] seems I was right. I've reverted as the change doesn't agree with the sources Nil Einne (talk) 04:47, 23 April 2009 (UTC)

Historical use of flat tax.[edit]

This section reads like it's POV, and has no citations. I'm going to mark it neutrality-disputed. Evilteuf (talk) 16:33, 20 November 2007 (UTC)

I haven't read through it yet, but could you please expand on why you think it is POV so the editors here can try to address it. I don't think a tag is needed if we can work to address the problem. You should normally only tag after discussion has not corrected the issue. Morphh (talk) 16:36, 20 November 2007 (UTC)

Flat tax[edit]

…10:26 a.m. e.s.t.≈ Concerning the Posting after 12:35 13 june 2007 ReferenceTemplate:72.74.234.9 posting her by D.G.DeL-Dorchester Mass wikipedia.com user talk/. PROPORTIONAL Flat Tax income 1.0 * taxrate {{{i Agree}}} PROGRESSIVE Tax agreed {{{{1.0}}}} REGRESSIVE Tax {{{1.0}}} I agree flat tax exemtion-----This is important for an Exemption is Granted and why is because it is exempted by Whom. Ahead of a bodied matter,which in the course at the begining would be perhaps the issuer exemting it through the Government concerning a flat tax in secne meaning if issued a F L A T T A X the why adjust it wich brings the Quality of a FLAT TAX to Reverse calculation,the study I've received and not ofcourse by this is the matter of the issue FLAT TAX the meaning in the dictionary is concerned with an even as for tax during King david's Reign an X perhaps established as a numeral number is a basic of an even and since it represents The Awareness of T&A it is concidered to be a horizontal matter tax in all both mean the same,in General a flat tax is an issue towards the value of something,which then is not a thing Pertaining to one unless haveing it,in source the value of a thing is what is cosidered overall by a tax, why then reinburse it,what the source is of value in which coinsists with the tallents of it,there could of been a better discription though,for an example if you build something the achievement would then be to accumilate the value this is called profit now if "it is considered within many under "a" controll' then the controll would estimate the value for exceptance. estimate is the value of production I'mhere about an erea,the erea is the deed,the circumstance of the erea is a capability of many,which are now involved "within" a gover-n-ment the collection of it's trade is the collection of it's production wich is a stable thing that is shared this thing is a tool to be used the tool earns profit trade and perhaps something else it continues to be collected as an income of source,till next time pened 10:13 a.m./e.s.t. 10:56 a.m.e.s.t.D.G.DeL-Dorchester Mass wikipedia user talk/David George DeLancey (talk) 15:59, 8 January 2008 (UTC)

True Flat Tax[edit]

This article references defines a "true flat tax" with a partial applied tax. There is a difference between a flat tax that taxes just income verses a flat tax that taxes income as well as already existing wealth. Therefore, I must argue that this WikiPedias article mention of the definition of "true flat tax" is actually not entirely correct. The only perfect flat tax is one that taxes both income and wealth, and therefore the perfect mechanism of a flat tax is a pure fiat money whereby tax is levied through gradual inflation. —Preceding unsigned comment added by Mozkill (talkcontribs)

Not really. If the government attempted to levy tax solely via inflation of pure fiat money, I could (assuming that I was sufficiently wealthy) avoid all taxation by spending all my money on desirable assets, including a plot of land at least large enough to make my family self-sufficient, then bartering for any needs that the land was unable to provide. -- Derek Ross | Talk 22:27, 13 March 2008 (UTC)

Texas and Florida in flat tax list?[edit]

Is 0% a flat income tax? If so, Texas and Florida should be included in the list of States & Providences with flat income taxes 70.116.11.119 (talk) 16:12, 7 May 2008 (UTC)


Why is New Hampshire listed here as having 5% income tax? I know there is 0% income tax in New Hampshire. —Preceding unsigned comment added by 76.119.147.52 (talk) 12:10, 10 September 2008 (UTC)

Cleanup[edit]

This article needs a major rework. The structure is horrible for an encyclopedia (For / Against), Fairness, Proposals, etc. I'm going to add a cleanup tag. Morphh (talk) 11:00, 20 May 2008 (UTC)

Opinions should be kept out of the article- especially when some of the opinions and statements are flatly wrong. For example, the statement that a progressive tax is more fair than a flat tax because the progressive tax weighs more heavily on those who have a large income is false. Both a poor man and a rich man have both done work to gain their income. To say that rich men didn't work hard to get rich is patently false because no one gets rich by doing nothing. —Preceding unsigned comment added by 75.62.17.139 (talkcontribs)

square rule-of-thumb and economic efficiency[edit]

In the brief "Economic Efficiency" section, it says: A common approximation in economics is that the economic distortion or excess burden from a tax is proportional to the square of the tax rate.[8] This is mentioned as a rule-of-thumb in the reference (p.68, with plenty of qualifications), but it's only one little piece of the article, not a major focus.

The rest of the paragraph says: A 20 percent tax rate thus causes four times the excess burden or deadweight loss of a 10 percent tax, since it is twice the rate. Broadly speaking, this means that a low uniform rate on a broad tax base will be more economically efficient than a mix of high and low rates on a smaller tax base. I've skimmed the source, and I can't find anything like that. It's not an obvious deduction, so it needs a source. Without a source on this latter bit, the "approximation" bit and the reference in general look irrelevant to this article, because its model uses a proportional tax rate throughout. CRETOG8(t/c) 16:32, 18 November 2008 (UTC)

if the rule of thumb is correct, doesn't the rest of the paragraph just follow from simple math? if the rule is untrue, then I can see why this should be removed, but if this rule is at all true, then this seems like an important piece of information that should be included for explanation of how this rule relates to a flat tax.99.149.112.167 (talk) 03:13, 10 January 2011 (UTC)

Can someone draw graphs of various taxes?[edit]

Can someone please draw some comparison graphs to show various taxes, including Thatcher's head tax, flat rate tax, graduated tax, etc.? A graph is worth a thousand words. Korky Day (talk) 23:49, 16 April 2009 (UTC)

The section "1.7 Race to the Bottom" should be removed[edit]

This section is about tax competition between different jurisdictions, which exists under any tax structure, not just a flat tax (as is written). If there are indeed people who criticize a flat tax because they argue that it somehow uniquely increases tax competition and causes a "race to the bottom," then that needs to be cited. Even then, it should also be noted that this argument is false, because tax competition is an issue that is entirely separate from the flat tax.

This is how it is done in section 1.2, in which Hall and Rabushka are cited as supporting the flat tax because it simplifies the tax code, but then it is pointed out that "Tax simplification ... is an issue wholly separable from that of the rate structure."

To sum up: if there is no similar citation available for section 1.7, then that section should be removed. If an appropriate citation is made, then a clarification similar to that in section 1.2 should be added as well. —Preceding unsigned comment added by 206.255.124.77 (talk) 19:47, 29 October 2009 (UTC)

criticism[edit]

The progressive taxation page has a "Arguments against implementation" section, and many wiki pages have "criticism" sections. Why not one for Flat Tax?

Currently the only mention of a flat tax possibly being regressive is wound up in a discussion of wages vs income. However, a flat taxe without deductions is regressive. An example. If you make $10,000 and you have to pay 20% in taxes, it will be very difficult for you to live (in the US), but if you make $100,000 and have to pay 20% you will not find it difficult to pay for necessitates.

I'm not an expert on taxation, but it seems clear that there should be some mention of this somewhere on this page. --24.10.132.113 (talk) 21:36, 7 February 2010 (UTC)

I agree. This article seems pro-flat tax with nothing to the contrary other than a single statement which is immediately "refuted". 65.65.230.52 (talk) 12:51, 4 May 2010 (UTC)

Yes, this is propaganda. There is virtually no material here in counter balance to the argument in favor. -- JohnPritchard (talk) 20:41, 21 June 2011 (UTC)

Increased spending is not the same as wasteful spending.[edit]

Under the section heading Discouraging Wasteful Government Spending, we have "...another positive effect would be to discourage increased spending by government". Increased spending is not the same as wasteful spending. In many situations and according to many political philosophies, increased spending can be a good thing.

Is the section trying to imply that ALL increased government spending is bad (obviously POV) or that wasteful government spending is bad? The latter is still POV, but would obviously be a very common view. HiLo48 (talk) 22:18, 17 May 2010 (UTC)


Regressive? - In the above example most of it holds except - the poor pay a far higher tax than the middle class who pay a far higher tax than the rich. No matter how much the current system is manipulated - deductions, yadayadayada... the poor pay SS and Medicare on all their income, sales tax on most of the rest, property taxes hide in their rent,.... While us well heeled have just oodles of extra cash we squirrel away in banks,stock and other neat stuff. The richer you are the more you have left over - gotta love the system. A poor man's taxes actually may amount to +-40-50% of his income and the rich ( per Buffet ) about +-14%. A straight flat tax would either cause the poor man to cheer or the rich man to faint. ( If a flat tax bill is more than 1 paragraph it wont be flat.)159.105.80.220 (talk) 15:50, 3 February 2011 (UTC)I would read the paragraph very carefully and check the location of all commas.

Map needs update[edit]

Map in Eastern Europe section needs to be updated. (e.g. Hungary now has flat tax). How was this map generated? —Preceding unsigned comment added by 138.251.155.80 (talk) 17:53, 1 April 2011 (UTC)

Updated map. It was generated with Scalable Vector Graphics (SVG). Heitordp (talk) 10:43, 8 August 2012 (UTC)

No legend in world map[edit]

Somebody raised this point, albeit rather inelegantly. The map in the section 'Countries that have flat tax systems' uses two shades of green, but there is no legend. It doesn't seem to be the same legend in the map of Europe a section above. I looked briefly and couldn't figure out what the colors meant. Can somebody who understands it add a legend? –CWenger (^@) 19:12, 20 July 2011 (UTC)

Updated map and fixed legend. Light green means no personal income tax, dark green means flat personal income tax. Heitordp (talk) 10:45, 8 August 2012 (UTC)

potential resource BusinessWeek (and related WSJ)[edit]

Bloomberg View: Why a Flat Tax Won’t Work; Making Swiss Accounts Less … Swiss ... The truth about flat-tax plans; it’s time the Swiss stopped protecting tax cheats October 27, 2011, 5:00 PM EDT

Also see related Talk:Rick Perry presidential campaign, 2012 and Talk:Herman Cain presidential campaign, 2012 # 9-9-9 WSJ resource

97.87.29.188 (talk) 22:32, 2 November 2011 (UTC)

Disputed[edit]

In the wake of the economic crisis and to save the economy and public sector, Iceland had to abandon the flat taxation. Both images are incorrect. Dnm (talk) 18:39, 21 January 2012 (UTC)

Slovakia abandoned the flat taxation too [8]. --Pass3456 (talk) 19:03, 3 August 2012 (UTC)
Updated maps. Slovakia is planning to abandon the flat tax, but it has not done so yet. Heitordp (talk) 10:46, 8 August 2012 (UTC)
Yes it has. From tax year 2013 on the flat tax is abandoned. [9], [10]. --Pass3456 (talk) 18:42, 9 August 2012 (UTC)--Pass3456 (talk) 18:42, 9 August 2012 (UTC)
You're right, and thanks for the source in English. I tried to read the source in German with an automatic translation but it wasn't very clear. Anyway, the flat tax is still valid for 2012, so I'll keep Slovakia on the maps until the end of the year. I also put a note in the article. Heitordp (talk) 00:01, 10 August 2012 (UTC)
Thank you. --Pass3456 (talk) 16:34, 10 August 2012 (UTC)

dissociate Flat Tax Rate from Flat Tax[edit]

In all honesty this Flat Tax Rate article should be dissociate from "Flat Tax". They are two different things and shouldn't be confused by abreviation. This article should be called Flat Tax Rate. A Flat Tax is a single qualtity of money levied across all income levels. 09/16/2014 — Preceding unsigned comment added by 50.129.195.131 (talk) 20:12, 16 September 2014 (UTC)

While it seems eminently logical, the problem with that view is that some really good sources referenced from the article, such as The Economist, and the IMF, see it differently. The IMF paper, in fact, gives us a definition, which clearly says that a flat tax is what you would like to see described as a flat tax rate.
Do you have some sources that support your perspective? HiLo48 (talk) 03:24, 17 September 2014 (UTC)


A flat tax would always end up as a regressive tax unless income was the only bsis for taxation. The poor in the US who pay no income tax, however, are the highest taxed people. Everything they pay or do is heavily taxed - amounting to a greater percent of taxes than any other group. 24.128.186.53 (talk) 17:29, 10 February 2015 (UTC)