Which tax takes the same share of income at all income levels?

• A. Progressive tax
• B. Regressive tax
• C. Proportional tax
• D. Inflation rate

Answer: (C)

A proportional tax keeps the tax rate fixed no matter how much you earn, so the tax burden as a share of income stays the same for everyone. If the rate is 10%, then someone earning $20,000 pays $2,000 and someone earning $100,000 pays $10,000—both are 10% of their income. That constant percentage is what characterizes a proportional tax.

A progressive tax, by contrast, raises the rate as income grows, so higher earners pay a larger share of their income. A regressive tax takes a larger share from lower-income households. The inflation rate isn’t a tax in the sense of a fixed percentage of income, so it doesn’t fit this concept.