Paradise City imposes a sales tax of 3% on everything that people buy within its city limits. Because this tax rate remains constant, regardless of the amount of goods purchased, this is a lump-sum tax.

Question

Quizplus · Accepted Answer

A lump-sum tax is a fixed amount, not a percentage of purchases. A 3% sales tax varies with the amount spent, making it a proportional tax, not a lump-sum tax.

Paradise City Imposes a Sales Tax of 3% on Everything