The positives of a flat tax include simplicity and a lower tax burden on some segments of the population. The negatives of such a system include the fact that it can increase income inequality by placing more of the tax burden on middle class and working class taxpayers, according to Forbes magazine.
A flat tax system is a system of taxation in which all taxpayers pay the same tax rate. It is popular with Republican politicians, such as Ted Cruz, Newt Gingrich and Rick Perry, and it is practiced in several countries, including Lithuania and Russia.
Proponents of flat tax systems argue that they are much simpler than progressive tax systems. A single tax bracket does not involve as much administration as several different tax brackets and is far easier to calculate, as reported by The Economist. Many also argue that a flat tax is an issue of fairness. Everyone pays the same rate of tax, and it can potentially be harder to avoid paying taxes. Some also believe that flat taxes increase the incentive to work, as people who earn more can keep the gains in their income.
Opponents of flat tax systems argue that they are not as simple as they seem. Much of the complexity of progressive taxation systems stems not from different tax brackets, but from deductions. Although some supporters of flat tax systems such as Rand Paul want to do away with deductions, this is unlikely to be popular with groups that benefit from deductions, such as charitable organizations. A strong criticism of flat taxes is the fact that they are essentially unfair. In progressive taxation systems, high earners pay more in taxes, which helps distribute wealth more evenly across the population. However, flat taxes may relieve the tax burden for the wealthy and increase it for the poor.