Question

Suppose an economist argues that it would be fairer if everyone in society had to pay the same portion of their income in taxes rather than pay taxes at different rates based on income levels. The idea about paying a flat amount in taxes on income is an example of which kind of tax?

Answer 1

Answer:

Proportional Tax

Explanation:

A proportional tax imposes the same flat rate (in %) on income as payable tax.

Other types of taxes are Progressive and Regressive Tax. In progressive, the higher you earn, the higher tax you pay while in Regressive, the higher you earn, the lower income tax paid and vice versa.