Difference between flat and progressive tax scales.

There are two main types of taxation scales - flat and progressive. What is the specificity of each of them?

What is a flat taxation scale?

This term refers to a tax collection system in which the payer pays to the state a particular fee at a rate that does not change depending on the increase or decrease in the taxable base (it can be represented by income or any assets of the taxpayer).

For example, citizens of the Russian Federation pay personal income tax from their salaries in the amount of 13%, regardless of what the actual amount of earnings is. Companies operating under the general taxation system transfer to the state 20% of any amount of profit received.

According to many experts, a flat taxation scale encourages a person to earn more - through business or professional development. After all, he can be sure that the dynamics of his income will not decrease due to the increasing tax burden (as in the case of a progressive taxation scale). Let us now consider, in fact, its specifics.

What is a progressive scale of taxation?

This scale assumes that taxes are levied by the state at a rate that increases with the growth of the taxable base.

There are no current fees in Russia that would be paid within the framework of such a scheme. In the former socialist countries, it is also not very popular, but it is common in many Western states. But in Western countries with a developed federal model of organization at the level of individual subjects, a flat taxation scale can also be introduced.

Among those states where there is probably the most "progressive" of the taxation scales of the type under consideration, is France. If a person working in this country has low incomes, then he pays minimum taxes, and sometimes is exempted from paying those. In turn, very large earnings (amounting, for example, several hundred thousand euros per year) are taxed at rates of about 45%. At the same time, during political discussions in France, proposals were made to raise the rate to 75% for income of 1 million euros per year.


The main difference between the flat taxation scale and the progressive one is that the first does not imply an increase in the tax rate as the tax base grows. In the second scheme, this approach is at the heart of the taxation mechanism.

Having studied the difference between a flat and a progressive scale of taxation, we will reflect the main conclusions in the table.


Flat taxation scale Progressive taxation scale
Does not imply an increase in tax rates depending on the growth of the tax baseAssumes an increase in tax rates as the tax base grows
Applied in Russia and many other former socialist countries, can be used in the subjects of federal Western statesPopular in Western countries