proportional tax, sometimes referred to as a flat tax, is a kind of income tax wherein all taxpayers are taxed at the same percentage rate, no matter how high or low their income. A proportional tax system means that everyone experiences the same tax rate, whether low, middle, or high-income. Those who support a proportional tax argue that the system is fairest because the rules are simple and straightforward and no one is exempt; however, there is a huge con of proprtional taxes. Explain what that is.

proportional tax, sometimes referred to as a flat tax, is a kind of income tax wherein all taxpayers are taxed at the same percentage rate, no matter how high or low their income. A proportional tax system means that everyone experiences the same tax rate, whether low, middle, or high-income. Those who support a proportional tax argue that the system is fairest because the rules are simple and straightforward and no one is exempt; however, there is a huge con of proprtional taxes. Explain what that is.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter9: Public Finance And Public Choice

Section: Chapter Questions

Problem 2P

See similar textbooks

Similar questions

Is the tax imposed on cigarettes a progressive, proportional, or a regressive form of taxation? Why? What are some other examples of this type of tax?
Suppose you earn $40,000 per year and pay taxes based on marginal tax rates. The first tax bracket, which taxes at 5 percent, ranges from $0 to $20,000. The second tax bracket, which taxes at 25 percent, ranges from $20,001 to $80,000. How much will you pay in total taxes? Instructions: Enter your answer as a whole number. 2$
Discuss how a government might use taxation to affect the distribution of income
Give a brief example of proportional tax system
In 1989, Senator Bob Packwood asked Congress’s Joint Committee on Taxation how much extra revenue the government would raise if it just started taxing 100% of all income over $200,000 per year. The Joint Committee crunched some numbers and reported an answer: $204 billion per year. a. What is wrong with this answer? In 1989, very few people made over $200,000 a year, so the estimate of the tax revenue is far too high. Increasing government spending by $204 billion each year would have generated economic growth, and subsequently even higher amounts of tax revenues. The Joint Committee on Taxation did not have the tools needed to make such an estimate accurately. No one would have an incentive to work once they had earned $200,000, so much of the taxable income would disappear.
suppose Lena makes $50000 per year and Mariah makes $65000 per year. If each pays $5000 in taxes: What would their individual tax rates be? Would you describe this tax system as proportional, progressive, or regressive?
Compare progressive, regressive, and proportional taxes. Give at least oneexample of each type of tax.
What is Proportional Tax?
Define progressive tax.
When assessing the welfare effects of taxes, we can conclude that They are always welfare increasing, because they allow the government to provide essential goods They are usually welfare decreasing in the market in which they are raised, but for society as a whole it depends on how they are used They are always welfare decreasing They are welfare neutral, because whatever is lost by producers and consumers goes instead to the government and therefore is just a reallocation of money
Discuss the taxation system of the United States. What kind of system does the U.S currently employ? What are the differences between direct and indirect taxes? What flaws does our tax system have, if any?
Suppose you earned $60,000 per year and pay taxes based on marginal tax rates. The first tax bracket which taxes at 10% ranges from zero dollars to $30,000. The second tax bracket which tax at 25% ranges from 30,001 to $120,000. How much will you pay in total taxes?