Question

How is the tax rate behavior under a proportional tax system?

• A. It remains constant regardless of the tax base
• B. It decreases with income
• C. It increases with income
• D. It varies unpredictably

Answer 1

Answer:

A. It remains constant regardless of the tax base

• Under proportional taxation, also known as a flat tax, the tax rate is fixed and applied uniformly to all income levels, making calculation straightforward