Scenario: There are 4 households in a locality. The annual income of the first household is $20,000, the annual income of the second household is $47,000, the annual income of the third household is $50,000, and the annual income of the fourth household is $71,000.
-Refer to the scenario above.If each family pays 12 percent of its income in tax every year,the local government follows a(n)________ tax system.

Question

Quizplus · Accepted Answer

If each household pays the same percentage of their income in taxes, regardless of their income level, it is a proportional tax system. In this scenario, all households pay 12 percent of their income in taxes, which makes it a proportional tax system.

Scenario: There Are 4 Households in a Locality