Proportional Tax (Flat Tax)
Plain definition
A tax system in which everyone pays the same percentage of income, regardless of how much they earn.
In economics
A proportional tax keeps the average rate constant across incomes: earn twice as much, pay twice as much tax. Supporters praise its simplicity and neutral incentives; critics note it is less redistributive than progressive systems and can feel burdensome to low earners since the marginal utility of the taxed dollars is higher for them.
Example
Under a 15% flat income tax with no deductions, a worker earning 6,000 and an executive earning 60,000. Both face the identical 15% average rate, so the system is proportional even though the dollar amounts differ hugely.
A proportional tax is confused with a lump-sum tax and with progressive brackets. Proportional means a constant RATE on income; a lump-sum tax is a fixed dollar amount (which is regressive in effect). A single flat rate is not the same as having multiple brackets.