There are seven states within the United States which employ a flat rate income tax. All taxpayers receive the same rate independent of the total amount of their earned income. Support of this type of tax system is fairly split between those who agree and those who oppose. Some suggest it is a fair system and stimulates growth because those with high income don’t have higher tax rates. However, this also means that low earners are burdened with the same tax rate. Others worry that because of limited deductions and tax credits to be found in a flat tax system, that taxpayers have less investing or seating opportunities by using tax breaks.
Listed below are the seven states that employ a flat tax system as well as their relative tax rate:
- Pennsylvania -3.07%