Multiple Choice
Assume you pay a tax of $4000 on a taxable income of $24,000.If your taxable income were $30,000,your tax payment would be $5000.This tax structure is:
A) progressive.
B) proportional.
C) regressive.
D) discriminatory.
The tax rate at $24,000 income is $4000/$24,000 = 0.167 and the tax rate at $30,000 income is $5000/$30,000 = 0.167,so the tax rate is proportional.
Correct Answer:
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