tasavero

Tasavero, often translated as flat tax, is a tax system that applies a single constant rate to the main tax base, usually earned income. This contrasts with progressive tax systems, where the rate increases with income.

In a typical tasavero, the tax base is taxed at one rate, often after a standard deduction or personal allowance. Some designs keep a basic exemption to protect low-income earners, while others offset the rate with credits or separate taxes on other bases to preserve progressivity.

The flat-tax idea gained prominence in the late 20th century through economists such as Robert Hall and Alvin Rabushka. It has been adopted in various countries in different forms; most notably, Russia implemented a single-rate personal income tax in 2001. Other regions have experimented with flat-rate elements in income or business taxes.

Proponents argue that tasavero simplifies administration, reduces compliance costs, and can encourage work and investment. Critics warn that a single rate tends to reduce tax progressivity, potentially increasing inequality unless compensated by credits, exemptions, or changes to other taxes.

In Finland and the Nordic context, tasavero is discussed as a policy idea in debates about fairness and simplicity. Policy proposals vary, with many maintaining some degree of progressivity through brackets, credits, or consumption taxes, while others advocate broader flat-rate reforms.