Tax type based on constant rate across income levels

Steps:

• Examine the table for tax amounts relative to disposable income levels.
• Calculate the effective tax rate (tax paid divided by income) for each level.
• Check if the rate remains constant across all income levels.
• Confirm the pattern matches a fixed percentage tax.

Why C is correct:

• Proportional tax applies a constant rate to all income levels, so tax increases linearly with income, as defined in tax theory where rate = tax/income remains unchanged.

Why the others are wrong:

• A: Direct tax refers to taxes levied directly on income or wealth, not specifying the rate structure.
• B: Indirect tax is levied on goods/services (e.g., sales tax), not directly on disposable income.
• D: Progressive tax increases the rate as income rises, unlike a constant rate.

Final answer: C