Question

A federal income tax reform proposal that would have a single rate applied to all taxpayers regardless of income level is called the

a) Progressive tax
b) Regressive tax
c) Flat tax
d) Consumption tax

Answer 1

A federal income tax with a single rate for all taxpayers is known as a flat tax, which is proportional to income earned by individuals.

Step-by-step explanation:

A federal income tax reform proposal that would have a single rate applied to all taxpayers regardless of income level is called a flat tax. Unlike a progressive tax, where the tax rate increases as income rises, or a regressive tax, where those with higher incomes pay a smaller percentage of their income in tax, a flat tax imposes the same tax rate on all taxpayers, making the tax proportional to income.

This means that whether a person earns $10,000 or $100,000, the tax rate would be the same for both, although the actual amount of taxes paid would differ because it is a percentage of their differing incomes.