What Is a Flat Tax?
The IMF working paper (2006) defines it as tax equals the rate times income minus the allowance, never below zero.
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1.What is a flat tax, according to the IMF definition?
The IMF working paper (2006) defines it as tax equals the rate times income minus the allowance, never below zero.
2.What is the marginal rate?
In a flat tax, the marginal rate is the same for everyone, while the average rate is tax divided by total income.
3.With a 20 percent rate and a 10,000 allowance, what tax does Marge pay on 30,000?
30,000 minus 10,000 is 20,000, and 20 percent of that is 4,000 (worked example).
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Education only. Not financial advice.