- The provided data shows that both citizens with different incomes pay the same 11% tax rate.
- Tax systems are classified as proportional, progressive, or regressive based on whether the rate stays constant, increases, or decreases with income.
- Since the 11% rate remains constant for both income levels (\(\$35,000\) and \(\$72,000\)), the tax system is proportional.
- Final answer: \(\boxed{\text{proportionally}}\).
Explanation
- Analyzing the Data
We are given data for two citizens, A and B, in a tax system. Citizen A has an income of \(\$35,000\) and pays an 11% tax rate, resulting in \(\$3,850\) of taxes paid. Citizen B has an income of \(\$72,000\) and also pays an 11% tax rate, resulting in \(\$7,920\) of taxes paid. Our task is to classify this tax system based on whether the tax rate remains constant, increases, or decreases as income increases.
- Defining Tax Systems and Evaluating the Data
A tax system is classified based on how the tax rate changes with income:
- A proportional tax (or flat tax) applies the same tax rate regardless of the level of income.
- A progressive tax increases the tax rate as income increases.
- A regressive tax decreases the tax rate as income increases.
Observing our data, Citizen A (income \(\$35,000\)) pays 11%, and Citizen B (income \(\$72,000\)) also pays 11%. Since the percentage remains constant at 11% across different income levels, the tax rate does not change.
- Conclusion
Because the tax rate is constant at 11% for both income levels, we conclude that the system is a proportional tax system. Regardless of the amount of money earned, each citizen pays the same percentage of their income in taxes. Therefore, the citizens are being taxed proportionally. The final answer is \(\boxed{\text{proportionally}}\).
Examples
Proportional tax systems are often used by governments to simplify tax collection. For example, if a local community decides to fund a new park by collecting a flat 2% tax on every resident's annual income, this is a proportional tax. Whether a resident earns \(\$20,000\) or \(\$200,000\), they contribute the same percentage of their earnings to the project, ensuring a fair and straightforward distribution of the cost. Understanding this concept helps in analyzing government fiscal policies and personal financial planning.