Either a progressive or proportional income tax is levied by the Confederation and by the cantons on the income of natural persons.

In Fig. 12-3 the demand for labour in the absence and presence of a proportional income tax is depicted as D and D T respectively.

If, for example, the poll tax were to be replaced by a proportional income tax, this would in general change the tax burden on the median person, and hence - assuming that he remains decisive change the voting outcome.

Let us first consider the impact of imposing a proportional income tax, that is, one that taxed a constant proportion of one's income however high, and raising the same revenue as a tax on one particular product, or a narrow range of products.