Which tax system applies the same rate to all income levels?

The correct choice, which describes a tax system that applies the same rate to all income levels, is proportional tax rates. In a proportional tax system, or flat tax system, taxpayers pay the same percentage of their income, regardless of how much they earn. This means that everyone, regardless of their income bracket, is taxed at the same rate, promoting uniformity in taxation.

This approach contrasts with progressive tax rates, where higher income levels are taxed at higher percentages, and regressive tax rates, which place a heavier burden on lower-income individuals relative to their income. Marginal tax rates reflect the tax rate applied to the last dollar earned and are usually part of progressive systems, influencing how much tax is paid as income increases. Understanding these concepts helps clarify how different tax systems impact individuals at varying income levels.