Question

Which sentence best describes a flat tax?

Answer 1

The correct answer is: "A flat tax taxes all taxpayers at the same percentage"

A flat tax is a type of tax based on the establishment of a constant tax rate, that will be applied to the total income earned by an individual, a household or a corporation. Therefore, a proportional tax would be a flat tax, as the total amount to be paid in concept of taxes is calculated as a proportion of the total income, and the size of such proportion is in fact indicated by the tax rate.

The other two types of taxes would be progressive and regressive, that consist on a tax rate that increases or decreases (respectively), the larger the income earned is.

Answer 2

The best option from the list would be that "A flat tax taxes all taxpayers at the same percentage," since this is in contrast to a "progressive tax," which taxes people with different incomes at different percentages.