What are the differences between flat tax and progressive tax systems?

What are the differences between flat tax and progressive tax systems?

A flat tax system applies the same tax rate to all taxpayers, while a progressive tax system increases the tax rate as income rises.

Which system is considered fairer?

Many argue that progressive tax is fairer because it takes into account the taxpayer's ability to pay, while flat tax can burden lower-income earners.

What are the advantages of a flat tax?

Advantages of a flat tax include simplicity, transparency, and potentially higher economic growth due to lower rates.

Are there any disadvantages to a progressive tax?

Yes, disadvantages can include complexity, potential disincentives for high earners, and the risk of tax avoidance.

Which countries use flat tax systems?

Countries like Estonia, Latvia, and Russia have implemented flat tax systems, often with varying rates.