Legal Definitions - proportional tax

A proportional tax is a type of tax where the rate of tax remains the same for all income levels. This means that everyone pays the same percentage of their income in taxes, regardless of how much they earn.

For example, if the proportional tax rate is 10%, then someone who earns $10,000 would pay $1,000 in taxes, while someone who earns $100,000 would pay $10,000 in taxes.

Proportional taxes are also known as flat taxes because they have a flat rate that applies to everyone.

One example of a proportional tax is a sales tax. In most states, the sales tax rate is the same for everyone, regardless of their income level. So if the sales tax rate is 5%, then someone who buys a $100 item would pay $5 in taxes, while someone who buys a $1,000 item would pay $50 in taxes.

Another example of a proportional tax is a property tax. Property taxes are based on the value of a person's property, but the tax rate is the same for everyone. So if the property tax rate is 1%, then someone who owns a $100,000 home would pay $1,000 in taxes, while someone who owns a $1 million home would pay $10,000 in taxes.

Proportional taxes are often criticized for being regressive, meaning that they place a greater burden on low-income earners than on high-income earners. This is because low-income earners have to spend a larger percentage of their income on necessities like food and housing, which are often subject to sales and property taxes.