Question

The income tax rate in a state is a flat 10 percent. Based on that rate, who has the higher tax burden?

Annual Income
Alex – $20,000
Beatrice – $190,000
Julio – $80,000
Roberta – $60,000

Alex
Beatrice
Julio
Roberta

Answer 1

Alex

Step-by-step explanation:

A flat tax system applies a uniform tax rate to all levels of income. Individuals with low-incomes pay taxes at the same rate as those with a high income.

The flat-rate system places a higher burden on individuals with a low income. After the tax is deducted, they remain with relatively less disposable income as compared to an individual with high income. Alex will have the highest tax burden. He earns almost ten times less than Beatrice, yet they pay taxes at the same rate.