Investor Glossary - Flat TaxInsightful stock market charts - Click here

 # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z     

Flat Tax


A flat tax system has a fixed tax rate regardless of level of income. The primary advantage of a flat tax is simplicity. Not only are flat tax computations and payments very straightforward, but in theory the economy also benefits from a minimum of distorted incentives driven by tax deductions in a flat tax regime. Usually, the flat tax is understood to apply only to earned income. Many conservatives favor this flat tax formulation because it eliminates capital gains taxes. Opponents describe such a flat tax system as regressive, meaning that the poor share a disproportionate burden. In contrast, the current US tax system is progressive because high-income earners pay a higher rate than low-income earners. The name flat tax comes from the flat line that results when tax rate is plotted against income. In 1994, Estonia became the first country to implement a flat tax, and when its economy subsequently thrived other countries followed suit.


               


Is the stock market headed lower? The answer may surprise you.
Find out now with the exclusive & highly regarded charts of Chart of the Day.


 Popular Terms : deferred revenue, forward PE, 401a, minority interest, retained earnings, deferred tax, trailing PE, average price per share, FICO score, real GDP, 144a, diluted share, wholly-owned subsidiary, net book value, cancelled check, 1031 exchange, debt service coverage, LIBOR, option premium, arm's length transaction, liquidity ratio, commodity, reverse mortgage, balance sheet, EBITDA, per diem, inflation, 1035 exchange, phantom income, Zero Cost Collar, assets under management, covered put, required rate of return, margin rate, APR, Key Rate Duration, current ratio, quant, class C shares, Russell 3000, stock, CUSIP, asset/equity ratio, Black Friday, annualize




 Rate the flat tax definition... Receive our free Term of the Day email.
 Your Rating:
 Poor 1 2 3 4 5  Excellent
Simply type in your email address and click submit:
 Comment:   
 


Subscribe   Unsubscribe
Home | Term of the Day | Tell a Friend | Suggest a Term | Edit Subscriber Detail
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2008 Investor Glossary - All rights reserved