Social Goals and Consequences of the Flat (Proportional) Taxation in Bulgaria

The main goal of the study is to reveal and if possible measure in quantity the main permanent consequences for low, average and high income groups of the population from the introducing of the flat tax, the decreased total size of the obligatory insurance installments, the increased share in them of the personal installments, the increased amount of the minimal wage and of the maximum insurance income. The concrete reports and analyses reveal that these changes and mostly the introduction of 10 percent flat (proportional) tax since 1st January 2008 lead to drastic (unfamiliar till now) and permanent redistribution of the total tax and insurance burden from high to (to the detriment of) low and average income groups, decrease of the available monthly incomes for the low and average income groups and their increase for the high and very high income groups without necessity of increase of their gross sizes, deepening of the income differentiation and the social polarization among the population, additional encouraging of the participation of low and average income groups from the employed in the grey economy and hiding wages and other personal incomes, hurting the feeling of social justice in the distribution, redistribution and end distribution and consumption of GDP, etc. On this basis concrete measures are suggested if not for overcoming, then at least for softening of the negative social consequences for the low and average income groups from the introducing of the flat tax.