Lets work an example to prove what I mean.
John works two jobs to earn $20k per annum. Bob earns $100k per annum. Lets assume the flat tax rate is 10%.
This means John has to pay $2k taxes on his income of $20k. This leaves him with $1500 to live on per month (1800/12).
Of that he has to either pay rent (although more unlikely is he is paying a mortgage). In San Jose, CA, rents can start at $1300/month for a studio apartment. That leaves him with $200 for food, utilities, car, insurance, clothes... Totally impractical?
Bob pays $10,000 in taxes, leaving him $90k to live on, and that is $7500/month. He can rent a place easily with that. Lets say he rents a place for $4500/month. This still leaves him $3k/month to pay for his food, utilities, car, insurance, clothes... quite feasible.
Yes there are people who are earning no more than $20k/annum. In San Jose the minimum wage is $10/hour, so if you do live on a minimum wage job with 40hours/week, you are sitting on $20k.