<p>If the country has a population of 2, person A and person B, consider this:</p>
<p>Current tax system:
Person A makes $100,000 taxed at 28% leaves him $72,000
Person B makes $20,000 taxed at 15% leaves him $17,000</p>
<p>total for government = $31,000 in taxes
total left in pocket = $89,000</p>
<p>Flat tax rate:
Person A makes $100,000
Person B makes $20,000
assume the government wants to collect the same amount of money, what will the flat tax rate be? It’s roughly 26%. So:
Person A makes $100,000 taxed at 26% leaves him $74,000
Person B makes $20,000 taxed at 26% leaves him $14,800</p>
<p>total for government = $31,200 (would be adjusted to $31,000 with the exact %)
total in pocket = $88,800 (would be adjusted to $89,000 with the exact %)</p>
<p>So Person B who makes $20,000 had to pay an extra 10% of his income, when the difference could have been covered by Person A at the cost of 2% of his income.</p>
<p>however, that said, there are flat tax rates available to you. All you have to do is make your way to Slovakia, Georgia, Romania, Serbia, Ukraine, Russia, Latvia, Estonia, or Lithuania. Notice something common about those countries? Yea. Wonder why all the rich people don’t move to those countries to get lower tax rates? Yea.</p>