Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A tax that varies with income
B
A fixed amount of tax regardless of income
C
A tax that is based on consumption
D
A tax that is assessed on property value
Understanding the Answer
Let's break down why this is correct
Answer
A lump-sum tax is a fixed amount of money that everyone must pay, regardless of their income or financial situation. This means that whether you earn a little or a lot, you pay the same set amount. The idea behind this type of tax is to keep it simple and easy to collect, as everyone pays the same. For example, if a lump-sum tax is set at $100, every person would owe that amount no matter what they earn. While this can be fair in terms of equal payment, it might be challenging for those with lower incomes to pay the same amount as wealthier individuals.
Detailed Explanation
A lump-sum tax is a set amount everyone pays. Other options are incorrect because Some might think this tax changes with income; This option suggests the tax is based on what you buy.
Key Concepts
lump-sum tax
Topic
Lump-Sum Taxes Explained
Difficulty
easy level question
Cognitive Level
understand
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