![]() ![]() We conclude that the flat tax led to increased income inequality and it stimulated households consumption particularly among the wealthiest households. The results also indicate that the income elasticity of consumption is decreasing across quartiles, from 81 to 71 percent. By contrast, a flat tax would eliminate almost all sources of conflict between taxpayers and the government. ![]() The Lorenz curve is illustrative, as only the last quantile of the population (richest 20%) appears as the clear winner of the flat tax. The inequality indicators we calculated (the Gini index, the relative mean deviation, the coeficient of variation, the standard deviation of logarithms, the Mehran index and the Piesch index) show an increase in inequality determined by the flat tax. We found that the higher the gross wage, the higher the flat tax gains. We compared 2005 against 2004, when we were able to isolate the flat tax impact from other factors. Help people by motivating them, not by issuing mandatory health insurance that will cost more and get less for the majority of people. The changes that the administration in 2009/2010 has made will hurt the country. In this paper we focused on the flat tax impact on inequality in Romania. The flat tax can really stimulate growth in the economy as it has in several other countries. ![]()
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