A proportional tax is an A progressive tax is a tax A regressive tax is a

income tax system where the that imposes a lower tax tax applied uniformly, taking a
same percentage of tax is rate on low-income earners larger percentage of income
levied on all taxpayers,
compared to those with a from low-income earners than
regardless of their income. A
proportional tax applies the higher income. from high-income earners. 
same tax rate across low,
middle, and high-income
taxpayers. 

TAXATION- a payment or finance to

the government/ local authority such as
sales tax, income tax.

Why is taxation imposed? How is the policy of taxation carried out?

To pay for- economic development, health
care, education, social service, housing,
improving infrastructure, defense
Parts of fiscal policy-
 To reduce the level of demand
 To help control inflation
 To discourage imports
 To maintain an equilibrium in current
account balance
 To redistribute income
Direct Taxation: Direct taxation involves taking
money directly from consumers’ incomes or
from company profits. They can be progressive
in effect as high income earners have to pay a
relatively high proportion of its income in the
form of tax than the low income earners. Such
examples include corporation tax, income tax,
inheritance tax, capital gains.
Indirect Taxation: Such form of tax is passed
on to consumers as a part of the purchase of
goods and services. They are essentially fees
that are levied equally upon taxpayers, no
matter their income, so rich or poor, everyone
has to pay them. But many consider them to
be regressive taxes as they can bear a heavy
burden on people with lower incomes who end
up paying the same amount of tax as those
who make a higher income. Some examples
include sales tax, license, custom duties, excise
duties.