A proportional tax system, also known as a flat tax, requires all individuals to pay the same fixed percentage of their income in taxes, regardless of their earnings level.

The tax rate remains constant and does not vary with increases or decreases in income.

Example: At a flat tax rate of 10%:

• Alice, earning $1,000, pays $100 in tax (10% of income).
• Bob, earning $5,000, pays $500 in tax (10% of income).
• Carol, earning $10,000, pays $1,000 in tax (10% of income).