proportional tax


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Related to proportional tax: degressive tax

proportional tax

A tax that charges the same percentage of income,regardless of the amount of income;also called a flat-rate tax.

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Perhaps if taxation was done on the basis of possibly achieved income, the discussions on the selection of progressive taxes - proportional taxes would be less fervent and the fiscal equity requirement would be easier to accomplish.
This tax is a proportional tax, but it becomes a regressive tax once the upper limit is reached.
However, we could modify our model by setting up a fixed amount of relief rather than a proportional tax deduction for net losses and show that a positive amount of relief would increase social welfare.
In making this argument, Trostel uses an econometric model with a proportional tax rate, and it is assumed that the direct costs of obtaining higher education are not tax-deductible.
Thus, John Stuart Mill's formula of the "ability to pay" doctrine in the 19th century calls for a proportional tax on income above subsistence (see Musgrave 1985, p.
The income tax function consists of two parts, a progressive income tax and proportional tax on income.
Income from capital is subject to a proportional tax of 30 percent.
The elimination of the proportional tax break would generate 3.3 trillion yen a year.
The government's tax panel started talks Tuesday on tax reform for fiscal 2005, focusing on reviewing proportional tax cuts introduced in 1999 in a bid to restore the nation's dwindling finances.
Nor does it follow that just any arbitrary magnitude of the proportional tax is justified.
Each consumer faces the full-income budget constraint wT + N = C + wl, with w = w(1 - t) where w is the fixed gross wage, t is a proportional tax rate on labor income, T is the total time endowment, and N is non-labor income.
With respect to vertical equity, [a.sub.2] > 0 indicates a progressive tax system, [a.sub.2] < 0 indicates a regressive tax system, and [a.sub.2] = 0 indicates a proportional tax system.

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