Reply #52: I don't think this is how the flat tax is supposed to work . . .

[NavajoRug]

Even with a flat tax in place, I believe there would still be personal exemptions and child deductions in place.

Let's say the personal exemption is $5,000 per year. The person who earns $15,000 would not get taxed on the full $15,000, but on the $15,000 minus his personal exemption. This means he would pay 15% of $10,000, or $1,500. His effective tax rate, therefore, is 10%.

The person who earns $150,000 would get the same $5,000 exemption, so he would pay 15% of $145,000, or $21,750. His effective tax rate is about 14.5%.

As a result, you end up with different effective tax rates even though the system is considered a "flat" tax rate system.