Question

5) How would a new sales tax on groceries likely affect low-income and high-income households? A) It likely to impact low-income households more because it is a regressive tax. B) It likely to impact low-income households more because it is a progressive tax. It likely to impact high-income households more because it is a regressive tax D) It likely to impact high-income households more because it is a progressive tax.​

Answer 1

A new sales tax on groceries likely affects low-income and high-income households- option A. It is likely to impact low-income households more because it is a regressive tax.

Sales tax is a percentage that is added by the government to the cost of a product or service when purchased by a consumer paid to the government body.

• It is a regressive tax due to the fact that the percentage of the cost of service paid as the tax causes income decreases.
• It is paid by everyone the same sales tax rate, someone who makes less money such as lower-income households uses more of their income to pay the tax than someone such as higher-income households who makes higher income.
• the tax burden as a share of income is highest for low-income households.
• A progressive tax higher percentage rate on households with higher incomes.

Thus, A new sales tax on groceries likely affects low-income and high-income households- option A. It is likely to impact low-income households more because it is a regressive tax.

Learn more about progressive tax:

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