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What are the benefits of a flat-tax system?
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The primary benefit of a flat-tax system is that it simplifies tax filing and payment. With a flat-tax system, taxpayers only need to fill out one form for both their income taxes and any other applicable taxes such as sales taxes or property taxes. This makes filing taxes simpler and easier than with a progressive tax system which requires multiple forms and calculations. 2 Another advantage of a flat-tax system is that it reduces the complexity of taxation by eliminating certain deductions and credits that may be available under a progressive tax system. This can help simplify financial planning and make tax preparation less expensive. 3 A third benefit of a flat-tax system is that it encourages economic growth since it creates a more level playing field between businesses and individuals. This allows companies to compete on an equal footing and helps create jobs. 4 Finally, a flat-tax system can also reduce inequality because it eliminates the potential for higher earners to pay a disproportionate share of taxes.