If with the increase in income, the percentage of income collected as tax remains constant, tax will be…
A tax is proportional when the tax collected is a constant percentage of income at every income level. Under a progressive tax that percentage rises as income rises, and…
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If with the increase in income, the percentage of income collected as tax remains constant, tax will be called
Answer and explanation
Correct answer C
A tax is proportional when the tax collected is a constant percentage of income at every income level. Under a progressive tax that percentage rises as income rises, and under a regressive tax it falls. A neutral tax is one that does not distort economic choices, which is a different idea.
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