Proportional Taxes

Proportional taxes, also known as flat rate taxes, charge the same tax rate from all taxpayers.

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The benefits of proportional taxes include simplicity, fairness, economic incentives, reduced chances of tax evasion and many more.

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However, disadvantages include regressivity, inequity, impact on the poor, limited revenue stability

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The formula for calculating proportional taxes often involves the tax multiplier, beginning with the Marginal Propensity To Consume (MPC)

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Proportional Taxes