BY: AKIB JAVED KHAN

DEPARTMENT OF MARKETING ,BU.

TAX RATE

Definition of 'Tax Rate:

The percentage at which an individual or corporation is taxed. The tax rate is the tax imposed by the federal government and some states based on an individual's taxable income or a corporation's earnings.

1. Progressive tax rate2. Proportional (flat) tax rate3. Regressive tax rate

PROGRESSIVEA tax that takes a larger percentage from the

income of high-income earners than it does from low-income individuals.

Basically, taxpayers are broken down into categories based on taxable income; the more one earns, the more taxes they will have to pay.

REGRESSIVE

A tax that takes a larger percentage from low-income people than from high-income people. A regressive tax is generally a tax that is applied uniformly. This means that it hits lower-income individuals harder.

PROPORTIONALA tax system that requires the same

percentage of income from all taxpayers, regardless of their earnings. A proportional tax applies the same tax rate across low-, middle- and high-income taxpayers. The proportional tax is in contrast to a progressive tax, where taxpayers with higher incomes pay higher tax rates than taxpayers with lower incomes.

A proportional tax is also called a flat tax.