Which of the following statements about lump-sum taxes is correct A. A lump-sum tax means that tax revenues vary directly with GDP. B. A lump-sum tax means that tax revenues vary inversely C. A lump-sum taxes means that the tax applies to only one time period. D. A lump- sum tax means that the same amount of tax revenue is collected at each level of GDP.
Lump-sum taxes are described as regressive taxes, meaning that the more income one has, the less they pay in proportion of their income to tax. As a result, they all pay the same, which coincides with D.
