A country is using a proportional tax when
A)its marginal tax rate equals its average tax rate.
B)its marginal tax rate is less than its average tax rate.
C)its marginal tax rate is greater than its average tax rate.
D)it uses a lump-sum tax.

Question

Quizplus · Accepted Answer

In a proportional tax system, the marginal tax rate (the tax rate on an additional dollar of income) equals the average tax rate (total taxes paid divided by total income), meaning everyone pays the same percentage of their income in taxes, regardless of income level.

A Country Is Using a Proportional Tax When