When Juan buys gas at the gas station, he is paying an added tax on the purchase. This tax is collected by the gas station and then submitted to the government, specifically for road maintenance purposes.
The key aspect here is understanding how the tax is applied and collected:
1. Direct Tax: This is a tax that is paid directly to the government by the individual or organization on whom it is levied. Examples include income tax and property tax.
2. Progressive Tax: This type of tax increases as the income or ability to pay increases. Higher-income individuals pay a higher percentage of their income in taxes. An example is the federal income tax in the United States.
3. Proportional Tax: Also known as a flat tax, it is a tax system that charges the same percentage of income from all individuals regardless of their earnings. A typical example is certain types of payroll taxes.
4. Indirect Tax: This is a tax collected by an intermediary, such as a retail store or gas station, from the person who ultimately bears the economic burden of the tax, such as the consumer. Examples include sales tax and excise tax. The gas station collects this tax when Juan buys gas, and the burden of the tax falls on Juan as the consumer.
The tax in question, which is collected by the gas station on Juan's gas purchase and aimed at funding road maintenance, falls under the category of an indirect tax.
Therefore, the correct answer is:
O Indirect
