A tax whose burden is the same proportion of income for all households is ?
Correct answer: B. a proportional tax
- A. an equal tax
- B. a proportional tax
- C. a progressive tax
- D. a regressive tax
Explanation
A proportional tax applies the same tax rate to every level of income, so tax paid rises in proportion to income. This differs from a progressive tax, whose rate increases with income.
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About Public Finance
Government revenue and expenditure are analysed through taxation, public borrowing, budgets, subsidies, transfers and public debt. The topic explains how fiscal policy affects resource allocation, income distribution, economic stability and growth, while distinguishing direct from indirect taxes, progressive from regressive taxation, and public goods from goods supplied by private markets.
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