To determine the type of taxation represented in the table, let's analyze how the tax rates change relative to the yearly income of each company. The table lists the yearly incomes and corresponding tax rates for four different companies:
\begin{tabular}{|l|c|c|}
\cline { 2 - 3 }
\multicolumn{1}{c|}{} & 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}
1. Proportional Taxation (Flat Tax):
- In a proportional taxation system, the tax rate remains constant regardless of the income.
- Here, the tax rates are not constant; they vary with income levels.
2. Progressive Taxation:
- In a progressive taxation system, the tax rate increases as the income increases. Higher incomes are taxed at higher rates.
- For Company A with \[tex]$50 million income, the tax rate is 10\%.
- For Company B with \$[/tex]100 million income, the tax rate is 12\%.
- For Company C with \[tex]$150 million income, the tax rate is 15\%.
- For Company D with \$[/tex]200 million income, the tax rate is 20\%.
- As the incomes increase from \[tex]$50 million to \$[/tex]200 million, the tax rates also progressively increase from 10\% to 20\%. This fits the definition of progressive taxation.
3. Indirect Taxation:
- Indirect taxes are taxes on goods and services rather than on income or profits. Examples include sales tax, VAT, excise duty, etc.
- The table pertains to incomes and tax rates and does not provide information related to indirect taxes.
4. Regressive Taxation:
- In a regressive tax system, the tax rate decreases as the income increases, placing more burden on lower incomes.
- This does not align with the tax rates increasing as incomes increase in the given table.
Given this analysis, the table best represents a Progressive taxation system in which the tax rate increases with an increase in the income level.
Therefore, the correct answer is: B. Progressive.
