Final answer:
The amount of tax collected is proportional to the cost of an item when a proportional tax rate is applied, meaning the tax amount increases linearly with the item's cost.
Step-by-step explanation:
Is the amount of tax collected proportional to the cost of an item after tax has been added? The answer is (a) Yes, proportional. This is because a proportional tax is one where the tax rate is the same regardless of the amount on which the tax is imposed. Hence, if you have a sales tax rate of 10%, it means that for every dollar spent on an item, $0.10 is collected as tax. If an item costs $1, the tax would be $0.10, making the total cost $1.10. If another item costs $10, the tax would be $1, making the total cost $11. The amount of tax collected scales linearly with the cost of the item.
In the context of sales tax, which is a common example of a proportional tax, if a net taxable estate of $1,000,000 is to be taxed at a fixed rate, the tax collected would be proportionate to that $1,000,000. Similarly, if an estate is worth $2,500,000, the tax collected would be proportionate to the $2,500,000, assuming the tax rate remains constant.