Income Inequality

[Polaris]

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.  

I work in the tax field for an American financial company and it pretty much means a flat tax on everything. They actually would want a flat tax on capital gain distributions....it's why I have people complaining why we have certain transactions as short-term instead of long-term.