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So does this mean that flat tax proponents are actually promoting the status quo, but with a simpler system? I'd hate to think they have a point...

I'm pretty sure that they're only looking at flat *income* taxes. Those are indeed progressive - but are more than counter-balanced by the other taxes we pay. But if they really do have in mind a truly flat income tax, then it looks as though it'd be more progressive than what we have now.

But that's not where we should be heading, of course: we'd want a tax mix that generates revenues without slowing economic growth rates. Consumption taxes will be an important ingredient of that mix, and its regressive effects would be balanced by progressive transfers.

So long as we have a decent system of transfers to low-income households in place, I can live with a less-than-progressive tax system. After all, Sweden's income tax regime is less progressive than what they have in the US. The difference is Sweden's system of progressive transfers.

You may want to do a closer analysis of this study before you buy into the conclusions. The high level point I took away is that the wealthy pay a lower percentage of income in taxes because a larger portion of their income is from capital gains. The study repeatedly says that the preferential treatment of capital gains is unwarranted and that capital gains should be taxed as regular income.

Inverted u-shaped is probably a more apt description than regressive, as the system is still progressive at the bottom, flattens out through the middle, then is regressive at the top.

The economics literature is pretty unanimous that preferential tax treatment of capital income is a good idea (e.g. http://www.minneapolisfed.org/pubs/region/99-12/capital-income.cfm). The study makes a poor argument to the contrary.

I think, Tom has right, the flat income taxes are in my opinion rather progressive then regressive. By the way, I have searched on internet and found an 2008 Canadian income tax calculator. I think, it could be usefull for you.

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