Consider two people, Sandy Ross, who earns $25,000, and Gary Belcher, who earns $50,000. If the flat-tax rate is 20 percent, then:

Question

Quizplus · Accepted Answer

The flat-tax rate of 20 percent means that both Sandy and Gary will pay 20 percent of their income as tax.

For Sandy, the tax amount will be:
$25,000 x 0.20 = $5,000

For Gary, the tax amount will be:
$50,000 x 0.20 = $10,000

Therefore, Gary pays twice the tax amount Sandy pays. Choice B is correct.

Consider Two People, Sandy Ross, Who Earns $25,000, and Gary