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Article: Proportional Tax
- Article from:
- Gale Encyclopedia of U.S. Economic History
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PROPORTIONAL TAX
A proportional tax system, also called the flat-rate tax, assesses the same percentage rate of taxation on everyone, regardless of income. If the proportional tax rate were set at 20 percent, an individual making $10,000 would pay $2000 in taxes; a person with an income of $50,000 would pay $10,000; and a person making $100,000 would pay $20,000. Even as the income goes up or down, the percent of total income paid in taxes does not change. It is the same percentage at all income tax brackets.
Many state income tax systems are very close to being ...