So I was poking around in my (ridiculous) wealth distribution graph and checked out specifically flat tax.
I got, as far as I can tell, nonsensical results:
Flat tax is supposed to be a flat percentage deduction from income, right?
My flat tax is currently 39%. So I’d expect every base income to be reduced by 39%.
My very poorest citizen (before redistribution) has got £755 income. Quick calculation would suggest they lose £294.45 due to flat tax. Instead, they lose £11825 or like 1566% of their original income!
Now, they actually end up being quite rich: £306717 or, if somehow flat tax is the last thing to be subtracted, before that particular tax is being subtracted, £318542, making the tax 3% of their disposable income. Which also doesn’t come out to be 39%.
How about somebody who already starts rich?
Richest person (before redistribution) got £196525, 39% of which is £76644.75. Their flat tax? £4434, or a paltry 2.26% of their original income!
After redistribution, but, if the flat tax comes as last change, they got £196525 + £4434 = £200959, making the tax about 2.21% of their disposable income.
Now obviously, as this already makes clear, how much influence any particular policy that is relative, rather than absolute, has, depends entirely on how and when it is being added on/subtracted.
However, I kind of doubt that, for the rich person, there is ever a point at which you could get the tax to add up to 39% of their income, bonuses or no.
I won’t even begin to check the logic for something like a progressive income tax, since I have no idea how that’s supposed to be modelled in the first place, but a flat tax is quite easy to check, since it’s just the same (relatively speaking) for everybody.
