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To answer the question about the type of tax that people pay on money they earn, the correct option is "income tax."
Here's a breakdown to help you understand:
1. Income Tax: This is a tax that individuals pay on the income they earn, such as salaries, wages, bonuses, and other sources of income. The amount of tax paid is usually based on a percentage of the individual's total income.
Other types of taxes mentioned in the options:
2. Flat Tax: A flat tax is a system where all individuals pay the same percentage of tax regardless of their income level. It's a fixed rate applied uniformly to all taxpayers.
3. Purchase Tax: This tax is applied to goods and services at the point of purchase. It's also known as a sales tax or value-added tax (VAT) and is based on the price of the item being purchased.
4. Progressive Tax: A progressive tax is a tax system where individuals with higher incomes pay a higher percentage of their income in taxes compared to those with lower incomes. The tax rate increases as income levels rise.
Remember, income tax is specifically related to the money people earn, making it the most relevant option in this context.
