Certainly! Let's examine the provided data in detail to determine the type of taxation that best represents the given table.
The table provides the following information:
| Company | Total Income | Tax Rate |
|--------------|------------------|----------|
| Company A | [tex]$50 million | 20% |
| Company B | $[/tex]100 million | 15% |
| Company C | [tex]$150 million | 12% |
| Company D | $[/tex]200 million | 10% |
To determine the type of taxation, we need to analyze how the tax rate changes in relation to the total income:
1. Company A has an income of \[tex]$50 million and a tax rate of 20%.
2. Company B has an income of \$[/tex]100 million and a tax rate of 15%.
3. Company C has an income of \[tex]$150 million and a tax rate of 12%.
4. Company D has an income of \$[/tex]200 million and a tax rate of 10%.
Observing the data, we can see that as the total income increases, the tax rate decreases. Here is the rate of decrease:
- From Company A to Company B: Tax rate decreases from 20% to 15%.
- From Company B to Company C: Tax rate decreases from 15% to 12%.
- From Company C to Company D: Tax rate decreases from 12% to 10%.
In a regressive taxation system, the tax rate decreases as the income increases. This means individuals or entities with higher incomes would pay a lower percentage of their income in taxes compared to those with lower incomes.
Since the tax rate in this table decreases as the income increases, it is characteristic of a regressive tax system.
Therefore, the type of taxation best represented by the table is:
A. Regressive.
