The notion of a flat tax does have a certain simplistic, egalitarian appeal. It confuses much-needed tax reform and tax simplification in defining taxable income with the unrelated issue of whether the rate applied to that income is flat or graduated. A lot of people don't understand graduated taxes. They think if you make more money you pay a higher rate on your entire earnings, which seems unfair. Graduated progressive taxes do treat all taxpayers equally .
Every taxpayer pays the same rate on equivalent layers of income.
People in higher brackets don't pay the higher rate on their entire income, only on the portions of income in the higher layers of marginal income. People, not dollars, are treated equally . Not all dollars are created equal. Those in the middle class are still very conscious of expenses, but have much greater flexibility in absorbing small fluctuations in income. While no one enjoys a dip in income, a loss of ten or twenty thousand dollars is often within the normal fluctuation of a wealthy investor's investment portfolio, whereas that amount would be disastrous to the middle-class worker.