The figure given below shows the income-leisure trade off of an individual.Figure 16.5
AB and AC: Income constraints of the individual
I 1 , I 2 , and I 3 curves show the income leisure choices of the individual.
-If the tax rate remains the same as the base increases, the income tax structure is said to be:

Question

The figure given below shows the income-leisure trade off of an individual.Figure 16.5
  AB and AC: Income constraints of the individual
I 1 , I 2 , and I 3 curves show the income leisure choices of the individual.
-If the tax rate remains the same as the base increases, the income tax structure is said to be:​

Quizplus · Accepted Answer

A proportional income tax structure means that the tax rate remains the same regardless of the income level. In the given figure, the income constraints AB and AC are parallel lines, which indicates a proportional income tax structure. Therefore, the best choice is A, proportional.

The Figure Given Below Shows the Income-Leisure Trade Off of an Individual.Figure