what is a proportional tax 
a proportional tax is sometimes referred to as a flat tax it is an income tax system that levies the same percentage tax to everyone regardless of income a proportional tax is the same for low middle and high income taxpayers in contrast a progressive or marginal tax system adjusts tax rates progressively by income low income earners are taxed at a lower rate than high income earners understanding proportional taxationa proportional tax allows people to be taxed at the same percentage of their annual income supporters of a proportional tax propose that it gives taxpayers an incentive to earn more because they are not penalized with a higher tax bracket flat tax systems make filing easier critics of flat taxes argue the system places an unfair burden on low wage earners in exchange for lowering tax rates on the wealthy a sales tax can be considered a type of proportional tax since all consumers regardless of earnings must pay the same fixed rate the sales tax rate applies to goods and services and the income of the purchaser is not a part of the equation other examples include poll taxes and the capped portion of the federal insurance contributions act fica payroll deductions 1greenland imposes a 45 flat tax one of the world s highest rates 2example of proportional taxesthe united states imposes a progressive or marginal income tax system on its taxpayers income is taxed on a graduated scale at rates that range from 10 to 37 3countries such as mongolia and kazakhstan impose flat taxes of 10 and bolivia and russia have a 13 flat tax rate 2 a citizen in bolivia subject to a 13 flat tax rate who earns the equivalent of 50 000 per year would pay 6 500 in taxes a person who earns the equivalent of 1 million would pay 130 000 although the federal government and most states in the u s impose a progressive tax system 11 states levy a flat tax on wage and salary income as of 2023 4pros and cons of proportional taxesproportional taxes are a type of regressive tax because the tax rate does not increase as the amount of income subject to taxation rises placing a higher financial burden on low income individuals a tax is regressive if it has an inverse association where the average tax carries less impact on higher income individuals or businesses opponents of the proportional tax argue that higher income earners should pay a higher percentage than taxpayers with lower incomes they claim that a flat tax system places a more significant burden on middle income earners to carry a large portion of government spending while the percentage is the same the after tax effect on low income earners is more burdensome than for high income earners however if a system has generous deductions then low income earners may be exempt from tax thus eliminating at least in part the regressive aspects of the tax variations of the proportional tax include allowing mortgage deductions and setting lower income levels 