To determine the type of taxation represented by the given table, we need to analyze the relationship between the companies' incomes and their respective tax rates. Let’s examine each row in the table:
- Company A has an income of \[tex]$50 million and a tax rate of 20%.
- Company B has an income of \$[/tex]100 million and a tax rate of 15%.
- Company C has an income of \[tex]$150 million and a tax rate of 12%.
- Company D has an income of \$[/tex]200 million and a tax rate of 10%.
From the data, we can observe the following trend: as the total income of the companies increases, the tax rate decreases.
Let's define the types of taxation to understand which one applies:
1. Regressive Taxation: In this type, the tax rate decreases as the taxpayer's income increases. This means that higher-income earners pay a smaller proportion of their income in tax compared to lower-income earners.
2. Proportional Taxation (Flat Tax): The tax rate remains constant regardless of the income level. All taxpayers pay the same percentage of their income.
3. Indirect Taxation: These are taxes that are not directly related to income but rather on goods and services, such as VAT or sales tax. This is not relevant to the given income table.
4. Progressive Taxation: In this type, the tax rate increases as the taxpayer's income increases. This means that higher-income earners pay a larger proportion of their income in tax compared to lower-income earners.
Given the observed trend where higher income corresponds to a lower tax rate, the taxation system depicted in the table is:
Regressive Taxation.
Thus, the type of taxation best represented by the table is:
A. Regressive.
