Salary FYI

Flat Tax

Tax

A tax system that applies the same rate to all levels of income without brackets or graduated rates, often paired with a basic exemption.

## Flat Tax

A flat tax applies a single rate to all taxable income. While simpler than progressive systems, it is often combined with a personal allowance that creates some progressivity.

### Countries Using Flat Tax

| Country | Rate | Personal Allowance |
|---------|------|-------------------|
| Russia | 13% (15% above ₽5M) | Standard deductions |
| Hungary | 15% | None |
| Estonia | 20% | €7,848 |
| Romania | 10% | Varies |
| Georgia | 20% | None |
| Bulgaria | 10% | None |

### Effective Progressivity

Even a pure flat tax with a personal allowance creates de facto progressivity. Someone earning $20,000 with a $10,000 exemption pays an effective rate of 10% (at a 20% flat rate), while someone earning $200,000 pays approximately 19%.

### Arguments For and Against

**For**: Simple, easy to comply, low administrative cost, transparent.
**Against**: Less redistributive, may shift burden to middle class, reduces government revenue flexibility.