# Flat Tax

*Taxes — Finicade finance glossary*

A flat tax applies one rate to all income, usually paired with a large exempt allowance. That allowance is what makes real-world flat taxes mildly progressive in effective terms even though the marginal rate is constant. Proponents argue for simplicity and neutrality; critics note that most complexity in tax codes comes from defining income and deductions, not from the number of brackets.

**Also known as:** flat rate tax, single rate tax

**Related terms:** [Progressive Tax](https://finicade.com/glossary/progressive-tax), [Regressive Tax](https://finicade.com/glossary/regressive-tax), [Marginal Tax Rate](https://finicade.com/glossary/marginal-tax-rate), [Tax Bracket](https://finicade.com/glossary/tax-bracket), [Value Added Tax (VAT)](https://finicade.com/glossary/value-added-tax)

Source: https://finicade.com/glossary/flat-tax