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Examine the four different companies in the table, which shows their yearly income and their tax rate. Which type of taxation does this table best represent?

\begin{tabular}{|l|c|c|}
\hline
Company & Total Income & Tax Rate \\
\hline
Company A & \[tex]$50 million & 10\% \\
\hline
Company B & \$[/tex]100 million & 12\% \\
\hline
Company C & \[tex]$150 million & 15\% \\
\hline
Company D & \$[/tex]200 million & 20\% \\
\hline
\end{tabular}

A. Regressive
B. Proportional
C. Indirect
D. Progressive

Sagot :

Let's examine the information given in the table:

- Company A has a total income of [tex]$50 million and a tax rate of 10%. - Company B has a total income of $[/tex]100 million and a tax rate of 12%.
- Company C has a total income of [tex]$150 million and a tax rate of 15%. - Company D has a total income of $[/tex]200 million and a tax rate of 20%.

To determine the type of taxation represented by this table, we need to analyze how the tax rate changes with the income:
- For Company A, with an income of [tex]$50 million, the tax rate is 10%. - For Company B, with an income of $[/tex]100 million, the tax rate increases to 12%.
- For Company C, with an income of [tex]$150 million, the tax rate further increases to 15%. - For Company D, with an income of $[/tex]200 million, the tax rate reaches 20%.

Given this information, it's clear that as the income increases, the tax rate also increases. Such a pattern indicates the presence of a progressive tax system.

A progressive tax system is characterized by increasing tax rates as the taxable amount (income, in this case) increases. This means that individuals or entities with higher incomes pay a higher percentage of that income in taxes.

Therefore, based on the table, the taxation type that best represents the given data is:
D. Progressive