Question

The sometimes proposed "flat tax," such as one that takes 15% of income at all levels of income, is an example of a(n)

A. proportional tax
B. excise tax
C. regressive tax
D. progressive tax
E. value - added tax​

Answer 1

A flat tax that charges the same percentage of income regardless of the income level is known as a proportional tax.

Step-by-step explanation:

A "flat tax" that takes 15% of income at all levels of income is an example of a proportional tax. A proportional tax is one in which the tax rate is the same for everyone, regardless of their income level. Hence, if the tax rate is 15%, an individual earning $100,000 will pay $15,000 in taxes, and an individual earning $50,000 will pay $7,500.

Proportional taxes differ from progressive taxes, where tax rates increase as income increases, and regressive taxes, where individuals with higher incomes pay a smaller percentage of their income in taxes. Taxes like excise taxes on certain goods can be regressive because they may take a larger percentage from lower earners than higher earners. In contrast, a standardized employment budget is concerned with adjusting budget deficit or surplus to reflect what it would be if the economy were producing at potential GDP.