Suppose the city of Sharon, PA needed to raise taxes to fund improvements to downtown. The Sharon City Council decides to levy a tax of $500 on every household regardless of household income. This tax would be an example of a
a) progressive tax.
b) regressive tax.
c) proportional (flat) tax.
d) tariff.
ANSWER TO QUESTION
C) Proportional (flat) tax
A flat Or proportional tax system imposes the same percentage tax on everyone regardless of income.
While progressive tax means tax rate progresses from low to high. It's changes when taxable income increases Or decreases
While regressive tax is a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.
While tariff is a tax imposed by one country on the goods and services imported from another country.
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