Proportional tax

A proportional rate is when the payable amount of money at the same rate increases as the tax base.

In the VAT, a constant tax rate is applied, so that here there is a proportional rate.

This is also true for the contribution to the statutory health and nursing care in Germany, if one does not consider the additional contribution and thereby the decisive income does not exceed the income threshold. Above this limit, there is a declining balance rate.

With respect to the income tax then it is called a proportional tariff or a proportional tax if all taxpayers have to pay the same percentage of their income, regardless of their income level ( flat tax ).