Income Inequality

[Jenny A]

That's why flat tax proponents are usually wealthy.  They want to tax earned income only and not interest or capital gains.

That isn't what flat tax means. Flat tax means the tax rate is the same regardless of the amount being taxed, e.g. a person earning $20k a year would get taxed 10% say, and a person earning $20 million a year would also get taxed 10%. Flat tax says nothing about what should be taxed; it's a way of implementing the tax rate.

You can implement a flat tax policy which taxes income, interest, capital gains, etc. You could even set different tax rates for each of those income types (e.g. 10% income tax, 20% capital gains) and still call it a flat tax, as long as the tax rate wasn't affected by the actual amount being taxed.

I know it's not what flat tax means.  But, flat tax proponents in the U.S. almost always want to tax only earned income and not capital gains, interest, or business income.