To determine how the citizens are being taxed based on the chart, let's analyze the given data step-by-step.
1. Identify the Incomes and Taxes Paid:
- Citizen A has an income of \[tex]$35,000 and pays \$[/tex]3,850 in taxes.
- Citizen B has an income of \[tex]$72,000 and pays \$[/tex]7,920 in taxes.
2. Identify the Tax Rate:
- Both Citizen A and Citizen B are mentioned to have a tax rate of 11%.
3. Calculate the Effective Tax Rate:
- For Citizen A: [tex]\( \text{Effective Tax Rate} = \frac{\text{Taxes Paid}}{\text{Income}} = \frac{3850}{35000} = 0.11 \)[/tex] or 11%
- For Citizen B: [tex]\( \text{Effective Tax Rate} = \frac{\text{Taxes Paid}}{\text{Income}} = \frac{7920}{72000} = 0.11 \)[/tex] or 11%
4. Compare the Tax Rates:
- Both citizens have an effective tax rate of 11%.
5. Determine the Type of Taxation:
- Proportional Taxation: This type of taxation occurs when the tax rate remains constant regardless of the level of income. Since both citizens are taxed at the same rate of 11%, the taxation system is proportional.
- Progressive Taxation: This occurs when the tax rate increases as the income increases.
- Regressive Taxation: This occurs when the tax rate decreases as the income increases.
Since the tax rate (11%) is constant for both Citizen A and Citizen B, regardless of their different income levels, the taxation system described in the chart is proportional.
Thus, the citizens are being taxed proportionally.
