Suppose Bob earns $20,000 per year and Sue earns $100,000 a year. If a flat tax of 10 percent is imposed, Bob will pay _______ in taxes and Sue will pay_______ in taxes. This is an example of a _______ tax.

Question

Quizplus · Accepted Answer

A flat tax of 10 percent means both Bob and Sue pay 10 percent of their income in taxes, which is $2,000 for Bob ($20,000 * 0.10) and $10,000 for Sue ($100,000 * 0.10). This is an example of a proportional tax, where the tax rate is the same regardless of income.

Suppose Bob Earns $20,000 Per Year and Sue Earns $100,000