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23 July, 03:48

How does the rate of a proportional tax change with income?

A.) The rate increases as income increases.

B.) The rate remains the same, even if income increases or decreases.

C.) The rate decreases as income increases.

D.) The rate decreases as income decreases

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  1. 23 July, 03:49
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    B the rate remains the same even if income increases or decreases

    The government or tax collecting authority sets a fixed percentage of income, and then requires that percentage of every dollar paid as tax. This is in comparison to a progressive marginal tax rate which taxes at a fixed amount different brackets of income, but higher brackets are taxed at a higher rate. Proportional remains the same amount out of every dollar earned up to an unlimited amount or down to an income of $0.
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