Civic · 6 pages · 12 min

Why a flat tax is a different slope

A flat tax puts one rate on its base, so the marginal slope stays level instead of rising.

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From the opening

A flat tax applies one statutory rate to its defined taxable base, so the marginal slope does not steepen as that base grows. Where a progressive schedule bends upward from bracket to bracket, the flat design is a straight marginal line at whatever single rate the statute chose. The opening covers one rate keeps the marginal slope, equal rates are not equal bills, and an exemption moves the average.

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Inside

  • One rate keeps the marginal slope
  • Equal rates are not equal bills
  • An exemption moves the average
  • A head tax is a different flat
  • Where the idea stops applying
  • A distinction worth keeping

Sources

  • Flat rate tax on a defined base
  • Marginal rate versus average rate