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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|}
\cline { 2 - 3 } \multicolumn{1}{c|}{} & Total income & Tax rate \\
\hline Company A & \[tex]$50 million & 20\% \\
\hline Company B & \$[/tex]100 million & 15\% \\
\hline Company C & \[tex]$150 million & 12\% \\
\hline Company D & \$[/tex]200 million & 10\% \\
\hline
\end{tabular}

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

Sagot :

GinnyAnsweridn
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.
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