The Sales Tax

question 63

Multiple Choice

The sales tax

• A)is consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income people.
• B)is not consistent with the ability-to-pay principle because low-income individuals tend to spend a larger fraction of their income than do high-income individuals.
• C)is not consistent with the ability-to-pay principle because low-income individuals tend to purchase a smaller bundle of goods and services compared to high-income individuals.
• D)is not consistent with the benefits-received principle because low-income individuals spend less on goods and services than do high-income individuals, yet pay the same sales tax rate.