Does the flat tax work?.. The flat tax works in a country that is a former Communist state, with no investment capital, and low wage rates, which needs to build a capitalist economy from a base of approximately zero. The flat tax works if people are willing to pay a 20% sales tax on everything they buy to make up for lower revenue. The flat tax works if employers are willing to pay 34%, or more, in Social Security taxes for every employee they hire. The flat tax works in a country where almost everyone has the same amount of wealth so there's no need for the distributive effect of graduated rates. And if all these conditions are met, the flat-rate tax will probably work as long as the economy is on a path of steady growth. T R Reid
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The flat tax is a tax system that would replace almost all existing taxes. Under a flat tax, a taxpayer's liability for taxes would be determined by a single rate, which would be applied to all income. Like most flat-tax proposals, the tax would be progressive and set at a relatively low rate of 20%. The flat tax is also sometimes referred to as the "Fair Tax."

Source: A Fine Mess: A Global Quest For A Simpler, Fairer, And More Efficient Tax System

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