Why Would Consumer Decrease Consumption Even If Their Disposable Income

question 56

Essay

Why would consumer decrease consumption even if their disposable income has not changed?

---

Definitions:

United States

A country in North America consisting of 50 states, a federal district, five major self-governing territories, and various possessions.

Sales Taxes

Taxes imposed by governments on sales of goods and services, typically calculated as a percentage of the sale price.

Digressive

Relating to or denoting a method that reduces in pace or intensity over time or steps, often used in taxation to describe tax rates that increase less proportionally with the amount subject to tax.

Regressive

Pertaining to a tax system where the tax rate decreases as the taxable amount increases, disproportionately affecting lower-income individuals.